Economic and financial aspects of mine closure

Today, mine reclamation is a key component to a successful mine plan. Most of the industrialized nations have recognized the need to make mining activities relatively environmentally friendly, if they want to continue to benefit from the economic gains from mineral resource development. Countries such as the United States, Canada, Australia and South Africa are leaders in the field and have implemented relatively sophisticated legislation to ensure environmentally correct mine closure. These countries rely on a combination of strict control strategies and economic penalties to ensure compliance. Yet, from the firm's perspective, reclamation activities are counterproductive as they cut into profits. In order to attract economic development and earn much needed economic capital, most of the rest of the world, particularly the developing countries, lack effective mine closure legislation. The traditional command and control type of legislation that is sometimes used is either vague and therefore avoided, or not enforced appropriately, resulting in an undesirable level of environmental degradation. With the use of case studies from Brazil, this article shows that direct controls are effective in some instances and not in others. It proposes that economic and financial tools may be more effective than the traditional direct controls in getting firms to comply with environmental standards, particularly in developing countries where environmental compliance is more difficult to achieve. It explains the use of performance bonding as one type of economic incentive that has proven to be an effective environmental policy in mine planning and closure. The authors additionally push beyond the typical style of performance bonds to introduce a flexible bonding and insurance system that allows governments to maintain strict environmental standards but limits firms financial exposure during the mining process. Such a system learns from the successes of the industrialized countries that use performance bonding and is sensitive to the needs of developing nations to attract investment yet maintain environmental integrity.     

The internationalisation of the Australian mineral industry in the 1990s

Overseas mineral exploration and mining investment by Australian companies increased dramatically from the early 1990s until 1997. In the wake of the Asian economic crisis and lower commodity prices it declined somewhat in 1998 and 1999. Reflecting their international competitiveness, Australian resource companies were actively involved in projects in about eighty nations in 1999. This study assesses the extent of growth in exploration and mining operations, the distribution between large and small companies and the changing regional focus which has been occurring. It also reflects on some of the key influences on this development. These include a strong domestic finance sector, supporting mining services provision, technological competitiveness, a growing attractiveness of offshore locations and increasing structural impediments at home.     

Risks and opportunities for foreign investment in the mineral sectors of the Central Asian Republics: Kazakstan,Kyrgyzstan, Tajikistan and Uzbekistan

With the dissolution of the former Soviet Union in 1991, the nations of Central Asia gained independence and began the transition to market driven economies. Both the political and economic transformations of the Central Asian Republics (CARs) (Kazakstan, Kyrgyzstan, Tajikistan and Uzbekistan) have been difficult primarily because of a holdover of various centrally planned `command and control' approaches to national development. The extensive mapping and exploration of the CARs during the Soviet era (approximately 1921–1991) led to the discovery of several hundreds of mineral deposits that were subsequently evaluated, and it is this `pool' of known, but undeveloped, deposits which is of major interest to foreign and domestic companies. However, foreign investment in the mineral sectors of the CARs is at best quite modest and there are very few positive signs that foreign investment will increase dramatically in the near term. The major risks that the mining industry faces as it works in the CARs arise primarily from the fact that the nations are transitional economies which lack both a comprehensive legal framework and experience in dealing with foreign mining corporations and their practices. The major risks are political, economic, financial, infrastructure, contractual, environmental, social and cultural and workforce related. If all individual risk factors are weighted equally, the relative ranking of the countries (from least risk to most risk for mineral development) would be Kyrgyzstan, Kazakstan, Uzbekistan and Tajikistan respectively. However, such a classification scheme does not effectively weight the importance of mineral potential. If the risk criteria are weighted with respect to geologic potential, the ranking of the countries would be (from least risk to most risk) Kazakstan, Uzbekistan, Kyrgyzstan and Tajikistan, respectively.     

Mining amid decentralization. Local governments and mining in the Philippines

In recent years, as part of its neoliberal development paradigm, the Government of the Philippines has engaged in efforts to encourage extraction of the nation's mineral resources. The Philippines is also a country where decentralization has devolved substantial powers to local governments. Concern over potentially adverse environmental effects has led to opposition to mining by some local governments in the Philippines. This opposition has led to the withholding of consent to mining projects by local governments and, in some cases, the implementation of moratoriums banning mining. Central to this opposition have been the activities of civil society groups, and their collaboration with local governments. This collaboration has involved the drafting of legislation prohibiting mining and support of candidates for office who are opposed to mining. Collectively, Filipino local governments and civil society groups are examples of the concept of governance, a dispersed process wherein society manages itself for the betterment of all its members. For mining companies seeking to implement projects, it is no longer sufficient to have the consent of the national Government — that of local governance forces must also be considered.     

Sustainable development in the mining industry: clarifying the corporate perspective

This paper examines sustainable development in the corporate mining context, and provides some guidelines for mining companies seeking to operate more sustainably. There is now a burgeoning literature that examines sustainable development in the context of minerals and mining, most of which is concerned with sustainability at global and national scales. What is often challenging to ascertain, however, from these numerous perspectives on sustainable mineral extraction, minerals and metals recycling, environmental management, and social performance, is how sustainable development applies to mining companies themselves, and what steps a mine must take in order to improve the sustainability of operations. Since mining processes have the potential to impact a diverse group of environmental entities, and are of interest to a wide range of stakeholder groups, there is ample opportunity for the industry to operate more sustainably. Specifically, with improved planning, implementation of sound environmental management tools and cleaner technologies, extended social responsibility to stakeholder groups, the formation of sustainability partnerships, and improved training, a mine can improve performance in both the environmental and socioeconomic arenas, and thus contribute enormously to sustainable development at the mine level.     

Governance reform,external support,and environmental regulation enforcement in rural China: The case of Guangdong province

This paper examines how configurations of external support factors have evolved alongside governance reform in recent years and how these evolving configurations have affected regulatory enforcement in four counties in Guangdong Province in China. Based on in-depth interviews with leading officials in the local environmental protection bureaus (EPBs), we show that there have been increases in government and societal support for local EPBs in their regulatory work, thanks partly to a number of recent governance reform efforts, but many problems have remained. Based on a questionnaire survey of enforcement officials, we examine how the perceptions of government and societal support are related to EPB officials’ self-perception of effectiveness. It is found that both local government support and societal support have an influence on enforcement officials’ self-assessment of effectiveness, but the relationships varied considerably depending on various dimensions of effectiveness and the patterns of interactions between government and societal support.     

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 sustainable development: considerations for minerals supply

Sustainable development involves meeting the needs of human societies while maintaining viable biological and physical Earth systems. The needs include minerals: metals, fuels, industrial and construction materials. There will continue to be considerable demand for virgin mineral resources, even if levels of recycling and efficiency of use are optimal, and rates of population growth and globalisation decrease significantly. This article aims to stimulate debate on strategic issues for minerals supply. While the world has considerable stocks of mineral resources overall, international considerations of the environmental and social aspects of sustainable development are beginning to result in limitations on where mining will be conducted and what types of deposits will be mined. Current and emerging trends favour large mines in parts of the world where mining can be conducted within acceptable limits of environmental and social impact. Finding new deposits that meet such criteria will be all the more challenging given a disturbing global decline in the rate of discovery of major economic resources over the last decade, and the decreasing land area available for exploration and mining.
To attract responsible exploration and mining, governments of mining nations will need to provide: regional-scale geo-scientific datasets as required to attract and guide future generations of exploration; resource access through multiple and sequential land use regimes, and frameworks for dealing with indigenous peoples' issues; and arrangements for consideration of mining proposals and regulation of mines that ensure responsible management of environmental and social issues.
The minerals industry will need to continue to pursue advances in technologies for exploration, mining, processing, waste management and rehabilitation, and in public reporting of environmental and social performance.     

Effective Regulations with Little Effect? The Antecedents of the Perceptions of Environmental Officials on Enforcement Effectiveness in China

Enforcement gaps are an especially vexing problem in China due to pervasive "pro-growth" local government priorities, the weak administrative capacity of environmental agencies themselves, and relatively weak levels of societal support for a cleaner environment. This study seeks to examine this problem from the perspective of the local enforcement officials by empirically examining the relationships between these and other influences on their perceptions of enforcement effectiveness. Using samples of enforcement officials from the fast-growing cities of Chengdu, Dalian, and Guangzhou, this study finds that many of the more commonly cited problems related to regulatory enforcement were not as influential in accounting for variations in perceptions of enforcement effectiveness than the current literature might suggest. Moreover, this study also finds that the pattern of influences varies greatly across jurisdictions, with only the officials' belief in the legitimacy of the governments' policies being significant in all three samples. Strong influences on perceptions of enforcement effectiveness in two of the three samples include the environmental values of enforcement officials, their perceptions of organizational capacity for enforcement, and their assessment of government support for environmental protection. Although government support was found to be a strong predictor of enforcement effectiveness in two of the three samples, the influence of societal support had a somewhat mixed and more complicated effect. In addition, this study suggests that further improvements in enforcement effectiveness may be possible by cultivating or selecting enforcement officials with strong environmental values and beliefs in the legitimacy of the government's environmental policy to take charge of enforcement. Because it is generally accepted that local environmental protection bureaus are generally upgrading their organizational capacity for improvement as the result of increasing central government support for environmental protection and institutional restructuring, and because environmental awareness in China is growing, this study suggests that some incremental progress is likely in China's efforts to close the enforcement gap. Unfortunately, such improvements are likely to be masked by the steep trajectory of economic growth, the narrow scope of regulatory control (i.e., with scant attention paid to nonindustrial sources), and the migration of industrial pollution to rural areas.     

Economic impacts of mining

The mining industry can be critical to a nation's economic well-being. Impacts may be felt on a national or regional level, with their significance dependent in part on the resources under development as well as existing government policies. This paper examines typical economic consequences of mining and how such impacts are being felt in the so-called transitional economies of Asia and Europe. Clearly, while mining continues to play an important role in the economies of Russia, China, Vietnam and other transitional nations, the nature and impacts of mining are different by virtue of years of centralized planning in the industry and the use of non-economic measures of efficiency. The changing character of mining is today opening up new opportunities for foreign investment and technology assistance.     

Water quality changes in a polluted stream over a twenty-five-year period

The Deckers Creek watershed in northern West Virginia (USA), containing a land area of 166 km2 (63 mi2), has a long history of industrial development and attendant environmental abuses from both land and water pollution practices. The water in Deckers Creek was sampled in 1974 at 29 locations along the main stem and resampled in 1999-2000 to determine water quality changes over this 25-year period. Water samples were analyzed for pH, acidity, alkalinity, iron, and calcium at both times, while aluminum, manganese, zinc, and fecal coliform (FC) bacteria densities were added in 1999-2000. Water at almost all sampling points showed lower acidity and metal contents in 1999-2000 compared with 1974. Water pH increased at the mouth from 5.4 in 1974 to 6.0 in 1999-2000. Acidity and iron concentrations were decreased an average of 70% in the upper stretches of the creek. However, one major untreated point source of water from an abandoned underground mining complex continues to degrade the quality of the creek in its lower stretches. In the upper section, the water quality in Deckers Creek has improved due to decreased surface and underground coal mining activities, reclamation of abandoned and recently permitted surface mined lands, and natural healing of past land use scars from timbering and mining over time. The decrease in mineral extraction activities and the reclamation of disturbed lands has occurred due to the passage and enforcement of water quality and land reclamation laws and regulations. More time and additional reclamation projects will continue to enhance the water quality in the creek. Improved water chemistry in the majority of the creek, however, shows the previously unnoticeable biological contamination from sewage inputs.     

Spoken but not Heard: the promise of the precautionary principle for natural resource development

Too often, mining developments provide short-term jobs and taxes, and long-term environmental and community degradation. The 'precautionary principle', as practised by the European Union and increasingly by other nations, may provide an opportunity for local communities and others who bear the brunt of mining to employ a cautionary approach to mine permitting. Using the case of the Zortman-Landusky gold mine in Montana, the article illustrates how the precautionary principle might have precluded the tremendous losses suffered by the Fort Belknap residents who live near the now abandoned mine. The Native Americans and other protestors against the mine were correct in their worries about mine drainage affecting their watercourses and the precautionary principle might have limited mine development. The case also illustrates that economic data on mining companies need to go well beyond simple reclamation bond capability in order to avoid bankruptcy resulting in the neighbours and the government having to pay for clean-up.     

Spoken but not Heard: The promise of the precautionary principle for natural resource development

Too often, mining developments provide short-term jobs and taxes, and long-term environmental and community degradation. The 'precautionary principle', as practised by the European Union and increasingly by other nations, may provide an opportunity for local communities and others who bear the brunt of mining to employ a cautionary approach to mine permitting. Using the case of the Zortman-Landusky gold mine in Montana, the article illustrates how the precautionary principle might have precluded the tremendous losses suffered by the Fort Belknap residents who live near the now abandoned mine. The Native Americans and other protestors against the mine were correct in their worries about mine drainage affecting their watercourses and the precautionary principle might have limited mine development. The case also illustrates that economic data on mining companies need to go well beyond simple reclamation bond capability in order to avoid bankruptcy resulting in the neighbours and the government having to pay for clean-up.     

略论清代自然资源的保护与利用

清代在水土资源、林木资源、矿产资源的保护与利用等方面采取了积极有效的措施，包括开垦土地、兴修水利、发展生态农业、植树造林、加强法制、设立环保机构等。     

困境与出路:对我国环境保护中"稻草人现象"的社会学透视

在环境保护工作中,普遍存在管理对象胆子越来越大甚至肆无忌惮、环境保护部门胆子越来越小甚至无所作为、地方党政领导不断干预环境执法的现象,我们称之为“稻草人现象”。这一现象产生的原因是多方面的,它不仅损害了党和政府形象,而且严重破坏基本国策的执行。要逐步消除这一现象,根本在于制度创新。     

Financial failures in mining : Implications for LDC mineral policies

The risk of financial failure among LDC mining projects, always significant, has apparently increased during recent years. This situation, which is unlikely to change in the near future, has important implications for LDC mineral policies. In particular, it can no longer be assumed that mining will generate significant government revenues, traditionally regarded as the single most important economic benefit arising from large-scale mining projects in LDCs. Many LDC governments consequently need to reassess their mineral policies and place greater stress on maximizing economic benefits which will accrue even where mines fail to generate significant profits. Two such benefits are discussed, and concrete policy measures are suggested to illustrate the initiatives available to LDCs.     

The Asia-Pacific petroleum market

The late 1980s saw an astonishing turnaround in the Asian oil market. After years of stagnation, three main factors - economic dynamism, lower oil prices and reduced government regulation of the market - resulted in a consumption surge that surprised even those analysts who had predicted such a recovery. The chronically capacity-surplus refining industry saw a leap in profitability, and new construction began. Rapid demand growth spread from the middle distillates to such formerly depressed products as gasoline and fuel oil, and naphtha markets began to expand again as the petrochemical industry resumed rapid growth. At the same time that demand has been rising and demand patterns have been shifting, other changes have begun. A new environmental awareness has taken root in Asia, and new environmental standards are being set almost daily, not only in the richer countries of East Asia, but also in many of the region's developing nations. Unfortunately, traditional sources of low-sulphur oil for power generation may be limited in the coming decade. Despite many new discoveries within the region, Asian crude availability is shrinking, both in terms of availability on the international market and in terms of percentage contribution to regional oil demand. After years of decreasing reliance, the region will face rapid increases in imports from the Persian Gulf in the 1990s.     

Policies for the Planning and Reclamation of Coal-mined Landscapes: An International Comparison

Governments differ significantly in their attempts to mitigate the effects of mining disturbance. The approaches of Australia, Canada and the United States are reviewed here, relative to coal-mining reclamation. State and provincial examples (Queensland, Alberta and Montana) are used to illustrate legislation and planning below the national level. This paper explores three main issues that contribute to coal-mining reclamation: governmental level of legislation and planning; legislative scope; and inter-governmental co-ordination. The legislative histories vary, but are young and evolving. All require the submission of a reclamation plan before granting mining permits, enforce reclamation standards by security deposits and contain provisions for non-compliance. Australia and Canada are only beginning to address reclamation planning at the national level, whereas the United States has done so since 1977. The relationship to the environmental impact assessment process is uneven across the three nations. The United States and Canada have a larger percentage of their mined landscapes in a reclamation process, due partly to more stringent regulation. Reclamation effectiveness seems to centre less on centralization versus decentralization, and more on comprehensive scope, preventive approaches and multi-level governmental co-ordination.     

A review of mineral development and investment policies of Botswana

Botswana's mineral policy objective is primarily to maximize the national economic benefit from the development of mineral resources. In 1999, the government replaced the old mining code of 1977, which was out of tune with prevailing economic philosophies with a new mining code. Although, the old act had its shortcomings it served the country reasonably well for 20 years, during which time the country was transformed from being one of the poorest of the world's poor to a middle income country. One of the cornerstones of the new and old mining codes is that government does not subscribe to privately owned minerals rights. The Botswana government attempts to provide a fair balance between the various stakeholders. There are, however, areas in the mineral policy and mining codes that need to be critically reviewed as outlined in this paper.