Impacts of foreign investment on sustainable development in a Chilean mining region

The desert mining region of Antofagasta, Chile, enjoyed spectacular economic growth in the 1990s as a result of foreign direct investment (FDI), mainly in the exploitation of the region's rich copper deposits. In a country considered by international financial institutions to be a good example of economic performance, Antofagasta has been termed a model region,and Chile's economic and social development in the 1990s has been considered a suitable model for other Latin American countries. However, development indices based on statistical data must be examined with caution, as human welfare does not necessarily keep pace with economic growth. This article analyses the Antofagasta Region in terms of problems that may occur in conjunction with accelerated economic growth, and how these can affect the environment, as well as the regional labour market. The article also examines a regional economic strategy for Antofagasta recently proposed by the local government, and suggests new alternatives for the sustainable economic development of the region.     

Linkages in Ghana's gold mining industry: Challenging the enclave thesis

By 2009, Ghana was the second-ranked African producer after South Africa, and had become the world's ninth largest producer of gold, at some 3.8% of global production, up from 2.6% five years earlier. Gold production volumes and revenues rose significantly over the decade from 2000. Yet gold mining tends to be perceived negatively in Ghana, and is seen as providing far less than it should in terms of public revenue, employment, skills development and spillovers, and localised economic development. Gold mining is often depicted as having an enclave status, disconnected and isolated from the rest of the economy. In contrast, the research findings here demonstrate that after a period of strong investment and growth, gold mining can no longer be viewed as an enclave activity: it is in fact more deeply linked into the Ghanaian economy than hitherto understood, through a set of as yet under-researched but promising economic linkages, notably backward linkages, which can potentially be strengthened by policy and support measures.     

Global trends in gold mining: Towards quantifying environmental and resource sustainability

In recent years, due to public concern over perceived and actual environmental impacts, the global mining industry has been moving towards a more sustainable framework. For gold mining, there are a number of fundamental issues with regard to assessing sustainability. Commonly perceived as a finite and non-renewable resource, long-term gold production trends include declining ore grades and increasing solid wastes (tailings, waste rock) and open cut mining. Conversely, core sustainability issues include water, energy and chemical consumption and pollutant emissions—also known as ‘resource intensity’. It is important to recognise the links between gold production trends and resource intensity, as this is critical for understanding future sustainability challenges. This paper links data sets on historic gold mining production trends with emerging sustainability reporting to estimate resource intensity, demonstrating the sensitivity of ore grade for gold production and sustainability. Final judgement of the sustainability of gold mining must take account of the sensitivity of the ore grade in the resource intensity of gold production. This has implications for environmental policy and sustainability reporting in the gold mining sector.     

Rehabilitation of the Ghanaian mining sector

As part of the Ghanaian government's efforts to revive the national economy a series of measures were instituted. They included devaluation of the local currency, reduction of budget deficits and the rehabilitation of basic infrastructure. The mining industry plays an important role in the national economy and special measures were also introduced to encourage its rehabilitation and development. A new licensing system was introduced and a new fiscal regime was established which inter alia allows mining companies to retain part of their export earnings offshore. The response of the private investment community to those changes has been excellent and investment in the mining industry has increased substantially.     

Mining investment in Africa

Since 1985, there has been rapid growth in the presence of Australian exploration and mining companies in Africa. This paper sets out the reasons for the interest of those companies, now 20 in number, in various African mineral opportunities. Australian companies spent about US$16 million in 1992 on African exploration and evaluation, with over US$130 million spent on new mine development or expansion. The 20 Australian companies operate in 16 African countries, with two areas of focus, West Africa and Southern Africa. Using the responses to a survey sent to Australian companies operating in Africa in 1991, and to companies known to be interested in prospects there, the paper identifies and categorizes the policy and regulatory requirements needed by investors. Although a gloomy picture has often been painted of investment in Africa, Australian companies recognize that their risk taking, in the light of a declining investment climate in other mining areas, could promote a renaissance of world-scale mining in Africa.     

International mining taxation issues and comparisons

This paper presents the quantitative results of recent research on Canada's minerals and metals industry, and its international competitiveness for mineral investment. The information and analysis presented are derived from the work of a Canadian government-industry task force that was created in 1991, under the auspices of the Intergovernmental Working Group on the Mineral Industry (IGWG). Much of this work deals with mining taxation in several Canadian provinces. More importantly, an attempt is made to evaluate the total tax burden that the mining industry must bear, on a project basis, at all levels from exploration through refining operations in many important competitor countries. While the focus of the paper is on an international comparison of mining taxation, some non-tax issues relating to Canada's competitiveness for mineral investment are addressed .     

Multiple scales of diamond mining in Akwatia,Ghana: addressing environmental and human development impact

Ghana is the second largest producer of gold in sub-Saharan Africa, and has experienced a significant increase in national mining production over the last two decades. Between 1983 and 1998, the mining industry brought approximately US $4 billion in foreign direct investment to Ghana. While large-scale gold mining has seen a significant increase, artisanal gold and diamond mining product have grown exponentially. While much research has been conducted on gold mining in Ghana, there is relatively little research on the environmental and human development consequences of diamond mining in the country. Unlike other West African countries such as Sierra Leonne and Liberia, small-scale diamond mining in Ghana has not been linked to conflict but its role in development has also been relatively modest. This paper examines large and small-scale mining in Ghana's largest diamond mining town, Akwatia, and their relative impact on environmental degradation, health, and the livelihood of artisanal miners. We conclude that while an increase in artisanal diamond mining has been a means of employement and income-generation for small-scale miners, there are some human development challenges, related to environmental burden from land degradation and health. GCD is an ailing mining company in Ghana, in desperate need of an injection of capital to keep the mine alive, but botched bidding has slowed the process of de-regulating the company. We also conclude that the de-regulation of GCD may lead to a relatively reduced environmental burden in Akwatia and more revenue for the GCD to invest in the human development needs of communities in the town.     

The Effect of Government Involvement on the Economics of the Base Metals Industry

The correctness of the statement that surplus production and depressed prices in the base metal industries are the result of state ownership in the mining industry is examined by analyzing the production figure of publicly and privately owned companies. The conclusion is that for some metals the statement is true. But it is equally true that, for some, privatelyowned mining companies have also maintained high levels of production in the face of depressed demand. The reasons why both state and privately owned mining companies have not been able to rationalize production are examined. For privately owned companies it is suggested that a shift in the method of financing mineral projects, i.e. from retained earnings to bank loans, is an important factor.     

Mining investment promotion

Attitudes in developing countries with respect to private investment in natural resources have changed substantially in recent years. Countries must now compete for such investment by ensuring that policies pertaining to state participation, financing, marketing and taxation of mining ventures provide the investor with returns that are commensurate with the risks taken. Governments must also be prepared to help the investor compete on world markets through lower capital and operating costs. This entails granting exemptions of customs, excise and value added taxes as well as providing for policies on taxation, government participation, industrial relations, safety and environment, and procurement and personnel that are in line with international mining industry standards. Efforts to promote mining sector investment through the strengthening of technical ministries, preparation of basic geological and project information, investment symposia and an international mining council can be helpful in bringing opportunities to the attention of the investment community. But, these efforts can only succeed if the policy changes now being put into place continue to evolve and contribute to an atmosphere in which entrepreneurship and private investment can flourish.     

Patience is a virtue: Problems of regulatory governance in the Indonesian mining sector

Mining investment in Indonesia has been at a standstill for a decade. Clearly. international mining companies regard the country as a high risk destination for capital. Yet Indonesia is one of the most highly mineralised countries in the world and has expressed a desire to increase investment in the sector in the coming years. As a first step in this direction the government has introduced a new mineral and coal mining law to replace the highly regarded Contract of Work system. The government argues that this new law will reinvigorate mining investment in the country. This paper suggests that the new mining law will do little to improve the situation. Indeed, it is unlikely that Indonesia will become a preferred destination for mining investment in the foreseeable future. Poor regulatory architecture, endemic corruption, and a lack of institutional capacity continue to be of concern to investors.     

The investment climate for gold mining

This analysis compares the gold mining industry investment climate in the USA to the investment climate in Australia. These two major gold producing nation's industries share many similarities; in both the USA and Australia, there is evidence of a maturing gold mining industry. Each country has experienced a dramatic increase in gold production and, more recently, greater mining of refractory ore and development of more underground operations. In the 1980s both nations experienced a pronounced rationalization trend that consolidated some gold producing operations and eliminated others. Each country commands a disproportionately large share of exploration expenditures. Land access, a major concern in the USA, has also become a critical issue in Australia as well. For all their similarities, however, the two countries have differences that are significant enough to influence mining company investment decisions. This paper explores those differences and how they may affect the future course of these nations' gold mining industries. Both effective government policy making and corporate strategic planning will occupy a major role in the future course of the two nations' gold mining industries .     

Harnessing the bonanza: economic liberalization and capacity building in the mineral sector

Over the past decade many developing and transition economies have liberalized their investment regimes for mining and privatized formerly state-owned mineral assets. In response, these economies have witnessed increased foreign investment in exploration and development, growth in the number and diversity of mineral projects, and the opening up of new channels for harnessing increased economic and social benefits from development in the minerals sector. The restructuring of fiscal and regulatory regimes to encourage foreign investment, and the associated influx of mining capital, technology and skills, is transforming traditional relationships between mining firms, local communities and the government. This transformation necessitates a re-evaluation of the most effective policy approaches to capture increased economic and social benefits from mineral production. This article considers effective mechanisms for improving the capacity of developing and transition countries to maximize the economic and social benefits of mineral production. Common challenges associated with minerals economies are reviewed. Consideration is given to the opportunities for harnessing foreign direct investment and the possibilities for creating new partnerships between local communities, industry, government, and multilateral development agencies through social investment projects. The article concludes with a series of recommendations for the design and implementation of policy approaches towards harnessing mineral production for economic and social benefit following the liberalization of investment regimes for mining.     

Mining and social development: Refocusing community investment using multi-criteria decision analysis

This paper addresses the question: How can mining companies assess social investment projects so that projects create value for the company and communities in which they operate? Mining companies are still wrestling with the limits of their responsibility in relation to social development even though they accept the business case for community investment at a general level. Fully aware of the practical hazards involved in taking an active role in facilitating local development, companies increasingly avoid methods that are overly paternalistic or assume the functions of the national or local governments. Gaining senior management's commitment to long-term social projects, which are characterised by uncertainty and complexity, is made easier if projects are shown to benefit the site's strategic goals. Case study research on large global mining companies, including interviews with social investment decision makers, has assisted in developing a Social Investment Decision Analysis Tool (SIDAT), a decision model for evaluating social projects. Multi-criteria decision analysis techniques integrating business planning processes with social impact assessment have proved useful in assisting mining companies think beyond seeking reputational benefits, to how they can meet their business goals and contribute to sustainable development.     

浅析采煤塌陷区生态修复管理机制的完善

采煤塌陷区的生态环境治理是生态环境保护的一项重要内容。当前,采煤塌陷区所在的地方政府已经采取了相关的生态修复措施,并建立了相应的管理机构,有了一定的法制建设进展。但与采煤塌陷区生态修复相关的管理机制尚存在不足,诸如管理主体欠缺、管理体制不顺、法治不健全等问题普遍存在。因此,需要在环境管理转型的要求下进一步完善。     

Oil and gas reserves of the Middle East and North Africa

A quantitative estimate of the petroleum reserves of the Middle East and North Africa is presented and analysed in terms of the region's ability to meet current market demand for a sweet light crude. Costs of Middle East production are compared with those of other oil-producing regions. With an average costs of US$4/bbl, the Middle East has both the largest oil reserves and the lowest cost oil in the world. While new and improved technology of exploration and production may lessen this price advantage in the future, it will not eliminate it. Because of these two factors, the Middle East will continue to play an important role on the world energy stage well into the next century.     

The evolving structure of the European mining industry

A major restructuring of the mining industry has been going on since the early 1980s. Using 11 important minerals this paper analyses the changing pattern of control in the mining industry for European based mining companies. In general, European mining companies have increased their control over mineral production worldwide while North American based companies have shown a decline in control of production. Production of European state-owned mining companies has declined as a result of privatization.     

Modeling the impact of revegetation on regional water quality: A collective approach to manage the cumulative impacts of mining in the Bowen Basin,Australia

In this paper we quantify the additional water quality benefits that can be achieved through coordinated cumulative impact management. To do this we simulate coordinated and un-coordinated revegetation investments and compare their impact on achieving regional water quality goals. Our results show that coordination between multiple mining companies achieves additional benefits since prioritization is enabled across a broader range of investment opportunities. Additionally, when coordinated investment is permitted beyond the boundaries of coal mining leases, results show that additional benefits are greatly enhanced since these regions provide more rewarding investment opportunities. Results illustrate (a) how regional coordination may influence reputational benefits of investments, and (b) that coordination is beneficial when investment opportunities are unevenly distributed across the landscape. When additional benefits are achievable, we suggest that mining companies should develop collective investment projects with an understanding of how coordination influences project costs. Similarly, investment projects should be developed with an understanding of investment tradeoffs and how these may adversely impact on regional stakeholders and hence industry reputation. The mining industry has significant potential to contribute to regional wellbeing; however, land management policies must be flexible and promote incentives to enable companies to invest beyond compliance.     

Green research and development (R&D) investment and its impact on the market value of firms: evidence from South African mining firms

The importance of global corporate green research and development (R&D) investment is gaining momentum and South Africa is no exception. This paper examines growing economic perceptions that green financial and stock-market systems result in heightened corporate hyperopia and therefore increase long-term and future green investment associated with R&D. It reports on the findings of a survey of 14 South African mining firms listed on the Johannesburg Stock Exchange SRI index. The study found, that, these firms’ market value showed a positive association with Green R&D. It also revealed increased Green R&D activity among large mining firms in the country and that they are highly likely to maintain their level of such investment in the coming years. The study's outcomes thus add to the body of empirical knowledge on firm hyperopia in relation to corporate greening initiatives.     

Derivative mine valuation: strategic investment decisions in competitive markets

Successful management in competitive markets requires evaluation methods that respond to global market dynamics and provide investors with relevant information to make strategic investment decisions. These strategic decisions include decisions on investment timing, feasibility study and risk management and mine operating options. Conventional methods do not have the built-in capabilities to help investors handle these strategic issues. Advances in modern finance have had profound impacts on financial markets for options, futures and collaterized securities and offer appropriate tools in solving these problems. In this paper, the authors have extended the Brennan and Schwartz mineral resource model to develop the derivative mine valuation method based on the dynamic arbitrage theory. A copper mining venture has been evaluated using the derivative mine valuation and conventional methods. The results show that the derivative mine valuation method allows investors to maximize the venture's market value by exercising these strategic options.     

The diversification of the global mining equipment industry – Going new places?

This paper examines the profile of the global mining equipment supply industry, looking at the largest producers and consumers of mining equipment, tracking the changes in global flows of such equipment over the past decade. This paper shows that while the conventional producers of mining equipment (United States, Germany and Japan) have increased exports over the mining boom, the greater gain has been made by countries in the South (particularly China). The destination market for mining equipment has also begun to change, increasingly moving towards new mining sites (in Africa, East Asia and Latin America) and away from the traditional mining countries (Europe and North America). In SSA, China increasingly accounts for a rapidly growing share of mining equipment imports, but this trend is associated with the general increase in imports from China rather than China's resource specific engagement with SSA.