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.     

Mining development in sub-Saharan Africa

Mineral production from sub-Saharan Africa is an important contributor to the economy at the country, regional and global levels. As an example, in relation to global production, the region provides 40% of diamonds, 20% of bauxite and 20% of rutile. However, with two or three notable exceptions, the region's share of mineral production has been declining compared to that of other regions. Whereas in some cases ore reserve depletion has been a factor, the most important underlying cause has been the absence of an enabling environment to attract high-risk exploration investment and to support private sector mining development. There has also been insufficient re-investment by the region's state dominated mining enterprises. Overall, growth is unlikely to occur unless an enabling environment is created to secure and maintain the appropriate levels of investment. The World Bank has recently initiated an African Mining Policy Study with the objective of recognizing and then introducing required adjustment processes into the region's mining industry.     

Mining investment and regional development: A scenario-based assessment for Northern Sweden

The way in which mineral development contributes to economic development in the region where it takes place is important for the mining industry’s relations to the local community. The purpose of this paper is to provide an assessment of the regional-economic impacts of a large-scale contemporary iron ore project in Northern Sweden (including two new mines, two processing plants, and one pellet plant). The regional input-output model rAps, provided by the Swedish government agency NUTEK is used, and it explicitly addresses the linkages between demographic development, the labour market, industrial production and the municipal finances in a consistent modelling framework. The simulation results suggest an average employment multiplier of about 2-2.5 during the maximum production phase, indicating that for every 100 jobs in mining about 100-150 jobs are supported elsewhere in the local economy. The positive impacts in this case are made possible in large because of the existing mining cluster and local suppliers in northern Sweden. Still, these results are perhaps best viewed as an indication of the potential for local economic development as they neglect, for instance, potential supply constraints (e.g., attracting the necessary labour force, road infrastructure, etc.). Specific policies to further strengthen the regional linkage effects may therefore be necessary in order for this potential to be realized in practice, and attention would preferably be paid to policy measures that have positive external spillover effects on the surrounding geographical area.     

Local Dirt,Global Dreams: Mining investment and land use change in Arizona

A central problematic for researchers working at the interface of economic and environmental change is the development of research designs and methodologies that can satisfactorily link economic processes of global reach (such as direct investment) to environmental change at local and regional scales. This article reviews recent efforts to couple economic and environmental change and finds that relatively little effort has been made to use the direct investment process as a means of linking industrial restructuring to land use change. The article argues that direct investment, when conceptualised as a political-economic process involving the assemblage of a package of rights (to land, water, pollution permits etc), can be an effective vehicle for tracing through the impacts of industrial restructuring on local environments. To develop this analytical approach, an empirical case of mineral investment in the Gila Valley of eastern Arizona is presented. The case study identifies the acquisition of land and water rights as central strategic issues for mineral firms seeking to make investment, and traces through the impact of these acquisition strategies on existing patterns of land ownership and land use.     

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.     

Petroleum taxation in West Africa

The petroleum tax systems of nine West African countries are compared and analysed for their effectiveness in capturing the maximum amount of oil revenues. As a general rule, those countries which are major oil-exporting countries have the highest tax rates whereas those which are oil-importing countries have the lowest. The tax systems have changed over time, reflecting inter alia, changing national attitudes towards foreign investment, the price of oil and domestic needs. One conclusion reached is that many of the tax systems in place today are regressive in that the tax rates are fixed and are not adjusted to the profitability or non-profitability of the oil field .     

Fuel substitution in sub-Saharan Africa

Deforestation and decline in agricultural productivity are major concerns over large parts of sub-Saharan Africa. One of the principal causes for both these phenomena is the export of woodfuels from rural agroecosystems to urban markets. This process is noteworthy because of the size of the trade. Wood fuels (fuelwood, charcoal, and agricultural residues) constitute the most important source of energy in these countries, varying from 60% to 95% of total energy consumption. In terms of the environmental impact of the fuelwood trade, solutions typically considered are the introduction of improved cookstoves, fuelwood plantations, and fuel substitution by conventional fuels. This article examines the structure of the fuelwood problem, reviews the successes and failures of past experiences, and focuses on the potential for fuel substitution as an option to reduce the urban demand for fuelwood.     

Strengthening Agricultural Research in Africa

Training programmes that involve agricultural researchers with farmers and extension field-workers have helped national agricultural research systems in sub-Saharan Africa to improve their communication with farmers. The International Institute of Tropical Agriculture (IITA) has worked with national crop research institutes and agricultural extension agencies in building communication links with farmers. In a continent where population growth still outstrips food production increases, feedback from farmers on performance of high-yielding crop varieties and on new farming techniques is essential in boosting food production.     

Barriers to investment in third world mineral industries

This article looks at some of the barriers that have distorted the global flow of capital in the mining industry. The perceived threat of nationalization is discussed and Chile's expropriation of US copper mining companies in 1971 is examined. Political instability, leading not only expropriation but to loss of title, altered tax laws, and voided contracts, is also cited as a factor affecting investor confidence. Finally, inadequate infrastructure is regarded as a further barrier to development of Third World mineral industries.     

Investment in human capital in Africa

Summary The author analyses the problems currently faced by the African continent, recognises six factors which he believes are important in influencing the analysis, and argues that the only secure, renewable asset any country or continent has, is its people. He maintains that people development, rather than the classical economic forms of encouraging development, offers Africa a viable way forward. He then identifies a number of specific issues within such a strategy of investment in human capital.Brian Walker is the President of the International Institute for Environment and Development (IIED), and this address was given at the inaugural meeting of the International Year of Shelter for the Homeless, in London, on 18th April, 1985. A second, earlier, associated address was published inThe Environmentalist 5(3) 167–170.     

Trends in foreign investment : Agreements in the resources industry

Recent agreements between host country governments and foreign investors in the resource industries reflect an effort to meet the objectives of both parties. In some cases majority government ownership is combined with management control and the right of veto on certain policy questions by the foreign investor. Imaginative tax formulas are built into agreements that combine the principle of excess profits taxes with that of a minimum DCF rate of return. Expropriation risk is being limited by employing a high debt-equity ratio. Foreign investors are agreeing to programmes and policies that promote host country economic and social development, while host country governments are quaranteeing foreign investors against changes in laws that would affect their profits.     

Options for mining development in Africa

Self-sufficiency in agriculture has been the principal development target in Africa for the past decade. It is now generally appreciated that that target can only be reached if population growth can be controlled and farmers are paid to make it worth while to grow a surplus. Responsibility for the next phase of development – wealth generation – will depend largely by default on the rapid growth of mining, particularly smaller mines. This paper sets out the country requirements for a successful mining sector in Africa. Experience in Zimbabwe and elsewhere suggests that there are three essential components: (i) simple, transparent mining legislation that gives title to the discoverer of a mineral resource in the form of a freely tradeable property right; (ii) the availability of local and/or international sources of risk finance; and (iii) a workforce that includes numbers of persons who have been trained in the technical and financial aspects of practical mining.     

Constraints on small-scale mining in Africa

Contrary to expectations, small-scale mining has had little impact on the development of Africa, despite the relative scale of activities in that field. This situation is due to the fact that the sector is facing various constraints and deficiencies, some structural in nature and others technical. However, the analysis of constraints and weaknesses shows that their impact differs according to the country and to the extent to which the government is involved in small-scale mining as well as to its efforts to strengthen this sector. While some drastic and immediate measures could be taken now, in depth scientific research will also be required.     

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 .     

Food and hunger in Sub-Saharan Africa

Sub-Saharan Africa is by far and away the most disadvantaged of the world's three main developing regions. Worse, its situation has mostly been deteriorating for much of the past several decades. Its agriculture is severely under-productive, and per capita food supplies have been steadily dwindling. Its environments and natural-resource base, characterised by water deficits, soil erosion, fuelwood shortages, rudimentary agro-practices, and grossly inadequate infrastructure, are generally unfavourable for sustainable agriculture. The population has expanded until it far exceeds carrying capacity, yet its growth rate is the highest in the world. The region also suffers from more disease than any other region. There is widespread and deepening poverty. As a result of these and other problems, and despite major food imports, two-thirds of the people are malnourished, one-quarter of whom endure outright hunger, even semi-starvation. Both these proportions appear set to keep on increasing both relatively and absolutely. Were these problems to persist with their decades-long trends, there could eventually arrive a stage when much larger numbers of people would succumb to terminal malnutrition, precipitating a human tragedy of unprecedented proportions. Fortunately, success stories demonstrate that solutions are available, on the part of both governments concerned and international agencies. Because of ignorance, or rather ignore-ance of the potential mortality disaster ahead, however, not nearly enough has been done to address the challenge with the energy and urgency to match its scale.