Public preferences for timeliness and quality of mine site rehabilitation. The case of bauxite mining in Western Australia

Government departments that regulate environmental management for mining have a range of choices about the timing and quality of rehabilitation. Economic theory suggests that the cost incurred by firms should relate to the social cost of the environmental damage, however, there has been little work done on non-market values for mine rehabilitation. This study uses choice modelling to assess these issues for bauxite mining in state owned native forest in south-west Australia. The results show that the public place a relatively high value on the re-creation of vertebrate habitat and would prefer in situ mine rehabilitation over environmental offsets. Alcoa's current rehabilitation practices appear to be supported by the preferences revealed in this study.     

Optimum cutting age for timber resources with carbon sequestration

Determining the optimum cutting age for timber resources has proved to be a very challenging problem for both economists and silviculturists. Based upon Samuelson's seminal work on this issue, the majority of economists have concluded that the optimum felling age occurs at a time when the net marginal benefits fall below the current rate of interest. Recently, concern about climate change has increased the importance of forestry projects, since trees act as natural biological scrubbers by removing CO₂ from the atmosphere. By incorporating these carbon sequestration benefits, this paper re-determines the optimum cutting age using a multiple rotation model. The results of this reformulation show that, in afforestation projects, trees should remain in the ground longer than the period suggested by a timber-only model in order to absorb more CO₂.     

Could a public ecology approach help resolve the mountaintop mining controversy?

In recent years, controversy has grown around decisions related to mountaintop removal mining of coal in Central Appalachia, USA. While this mining method can be particularly efficient, it necessitates removal and relocation of huge volumes of earth—permanently altering the natural landform and potentially impacting local environments and communities. Current decision-making systems and regulatory frameworks have been largely ineffective at incorporating the values and concerns of stakeholders. This is due, in part, to contradicting policies, a legacy of distrust, and problems related to scale. Further, the lack of good civic science related to mountaintop mining and meaningful routes for public involvement have also hampered effective decision-making. We propose that the fundamental concepts of public ecology may provide a progressive approach to resolving these complex issues, and examine the challenges that must be met along the way.     

Capitalizing on energy supply: Western China's opportunity for development

Two kinds of disparities pervade China and threaten its well-being. The first, regional disparities focus on levels of economic development, which vary considerably across China. The second is largely a corollary of the first, referring to mismatch in energy supply and demand, with some places suffering severe shortages while others are blessed with significant surpluses. Western China enjoys the dubious distinction of recording the country's lowest levels of economic development while, paradoxically, being blessed with plentiful reserves of energy and non-energy minerals. Turning those surplus resources to good account through transferring them to minerals and energy-hungry Eastern China is seen by policy-makers as something of a panacea. Not only will such a strategy significantly boost Western China's economic prospects, but it will eliminate the resource shortages currently constraining the East's vibrant growth. The issues of regional disparities, energy mismatches and transfers of these resources are discussed, with attention given to both spatial and time perspectives. The paper concludes with a cautious endorsement of the policy initiatives that promote the strategy of mineral transfers.     

Tradable planning permits versus auctioned tradable development rights: different trading agents,different policy outcomes

The tradable planning permit (TPP) policy seeks to limit the land take by development. It can be used in countries where development rights are vested by land-use planning to certain landowners only. TPPs are traded among public authorities. We introduce here a new policy, called the auctioned tradable development rights (ATDR) policy, which takes advantage of unvested rights of development and of trading among private actors. We compare the TPP, the ATDR policy and our baseline land-use planning model using a set of criteria. There are trade-offs within compared models. Both trading policies extend opportunities for land protection from development in exchange for higher transaction costs (highest in the ATDR policy). Trading policies seek also to recapture a part of development rent, decrease rent-seeking, and locate new development more effectively from the investors' perspective. However, trading among public authorities in the TPP model may hinder attaining these effects.     

Measurement of market power for the environmentally regulated Korean iron and steel manufacturing industry

For industries in which where market prices of certain inputs are not available, measuring the degree of market power by using the markup over the marginal market cost may be inappropriate. With regard to the Korean iron and steel manufacturing industry, which is subject to environmental regulations, the calculation of the price of abatement capital is hindered by a lack of relevant data. To increase the reliability of market power markups, this paper estimates the restricted cost function in which abatement capital is assumed to be quasi-fixed at an optimal level and the supply relation. The degree of market power for the industry, measured as the ratio of the estimated market power markup to the supply price, was estimated to be 0.54 on average between 1982 and 2001. The results indicate that ignoring environmental regulations can overstate the degree of market power by approximately 12%.     

Natural resources and development: The gold sector in Mali

Resource-rich countries do not necessarily perform well, especially developing countries. A debate has developed since the 1990s about a “resource curse” hypothesis, which threaten to impede the resource-rich countries in taking advantage of their natural endowments. In Mali, a less-developed country, gold export has substantially increased since the 1990s. In this paper we show that widespread analyses, such as those of the Dutch disease and the quality of institutions, are not sufficient to understand what is at stake in Mali, and that the mining sector has proved to be neither a blessing nor a curse, at least until the present. Gold mining has brought budget revenues but induced few spillovers. As gold mining has now come to maturity, the die is probably cast.     

Measuring for success in communications for permits

Today, U.S. corporations are discovering the merit of combining the principles of total quality environmental management (TQEM) into their measurement and communications programs. This approach has been particularly productive in the permitting process that is necessary for starting, expanding, or sustaining plant operations—a procedure that can easily be thwarted in the absence of a prominent and aggressive communications component. The need to benchmark and measure such a communication program'S progress is critical both for internal management and for environmental regulators concerned that an applicant demonstrate a high degree of public involvement.     

Reforming small-scale mining in sub-Saharan Africa: Political and ideological challenges to a Fair Trade gold initiative

In sub-Saharan Africa, artisanal and small-scale mining (ASM) has caused a range of environmental, social and economic problems. Most of the donor support pledged to improve conditions in the sector to date, however, has failed to facilitate marked improvements, in large part because emphasis has been placed on technical interventions; at the same time, impoverished miners’ needs and concerns have been seriously overlooked. It is against this background that this paper critically examines the underpinnings and potential of “Fair Trade gold” as a solution to many of the problems plaguing the ASM sector and a mechanism for alleviating the hardships of its operators. Unlike the majority of ASM-support support measures implemented in the past, “Fair Trade gold” is entrenched in the discourse of “partnership” and “participation”. To ensure its effectiveness initiatives must be adapted according to the specificities of ASM.     

Preventing land loss in coastal Louisiana: estimates of WTP and WTA

A dichotomous-choice contingent-valuation survey was conducted in the State of Louisiana (USA) to estimate compensating surplus (CS) and equivalent surplus (ES) welfare measures for the prevention of future coastal wetland losses in Louisiana. Valuations were elicited using both willingness to pay (WTP) and willingness to accept compensation (WTA) payment vehicles. Mean CS (WTP) estimates based on a probit model using a Box-Cox specification on income was $825 per household annually, and mean ES (WTA) was estimated at $4444 per household annually. Regression results indicate that the major factors influencing support for land-loss prevention were income (positive, WTP model only), perceived hurricane protection benefits (positive), environmental and recreation protection (positive), distrust of government (negative), age (positive, WTA model only), and race (positive for whites).     

European aggregates production: Drivers,correlations and trends

Aggregates constitute the biggest branch of mining by production volume and the second in value, after the sector of fossil fuels. Their close connection with the construction industry places them among the most used materials worldwide, second only to water. Despite its significance, the sector suffers from the non-systematic register of production data, resulting in weakness to study the main features affecting the sector’s structure and future capacity. The paper focuses on the aggregates production in 26 European countries. Data from available sources are gathered and combined for a 10-year period (1997–2006), as an effort to provide a clear view of the major attributes of this vital industrial sector. Through a thorough analysis, the main drivers in aggregates production are revealed and existing correlations and trends are identified. New findings are also presented, for example the significance of GDP from construction and the strong connection of aggregates production per capita with the residential building sector.     

Exploring the origins of ‘social license to operate’ in the mining sector: Perspectives from governance and sustainability theories

In the mining sector, local communities have emerged as particularly important governance actors. Conventional approaches to mineral development no longer suffice for these communities, which have demanded a greater share of benefits and increased involvement in decision making. These trends have been spurred by the growth of the sustainable development paradigm and governance shifts that have increasingly transferred governing authority towards non-state actors. Accordingly, there is now widespread recognition that mineral developers need to gain a ‘social license to operate’ (SLO) from local communities in order to avoid potentially costly conflict and exposure to social risks. A social license can be considered to exist when a mining project is seen as having the ongoing approval and broad acceptance of society to conduct its activities. Due to the concept's relatively recent emergence, however, only a limited body of scholarship has developed around SLO. Drawing on examples from northern Canada, this paper uses governance and sustainability theories to conceptualize the origins of SLO in the mining sector and describe some of the associated implications. Further research is needed to determine governance arrangements which help facilitate establishment of SLO in different mineral development contexts.     

Challenges with eradicating illegal mining in Ghana: A perspective from the grassroots

This paper argues that artisanal mining communities are somewhat bound to their operations, and helps explain why formalisation, alternative livelihood projects and military intervention—the traditional strategies employed by governments to tackle illegal mining—have proved ineffective. Findings from recent research carried out in Noyem (Eastern Region of Ghana) are used to illustrate why illegal artisanal mining is such a deeply rooted activity in sub-Saharan Africa. The analysis provides four explanations in support of this: a heavy involvement of traditional leaders in operations; the mindsets of many operators toward alternative income-earning activities; the numerous and diverse range of employment opportunities provided by the sector; and the level of investment in operations.     

Rare earth elements as critical raw materials: Focus on international markets and future strategies

Supply of some critical raw materials by European industry is becoming more and more difficult. After the case of natural textile fibres, in particular cotton, and timber, over the last few years the problem of rare earths (REs) availability has also risen. The 97% of the global supply of rare earth metals (REMs) is produced by China, that has recently done copious cuts of its exports, apparently in order to protect its environment. This fact has greatly increased the REs prices, causing tension and uncertainty among the world hi-tech markets. Many of these materials, in fact, have very few effective substitutes and low recycling rates too. In addition, their natural reserves of rare earths are concentrated in a small number of countries (China, Brazil, US, Russia, Democratic Republic of Congo). REMs are a group of 17 elements particularly used in many new electronic and advanced components: such as fuel cells, mobile phones, displays, hi-capacity batteries, permanent magnets for wind power generation, green energy devices, etc. Many analysts foresee much more requests in the next decades.     

Tradeable permits and the comprehensive approach to climate change

The need to constrain the rising concentration of greenhouse gases in the atmosphere has led to a growing interest in efficient ways of achieving it. Many analysts have argued for the advantages of tradeable emission permits. Others have pointed to the importance of addressing all sources and sinks of greenhouse gases. However, this 'comprehensive approach' at present appears incompatible with the use of tradeable permits, because few sources and sinks can be monitored with the accuracy required for such a system. It is not enough to make rough approximations, because inadequate monitoring and revision of approximations could disrupt the whole system. The best approach is to start by developing an efficient control system for the major sources which can be adequately monitored - primarily fossil-fuel CO₂ - and by ensuring that other sources and sinks may be introduced over time. This can be achieved by starting with a system of overlapping permits which focuses upon the major quantifiable sources (notably fossil CO₂), and introduces revisions as permits are retired and reissued.     

The Environmental sustainability of mining in Australia: key mega-trends and looming constraints

At first ‘sustainable mining’ could be perceived as a paradox—minerals are widely held to be finite resources with rising consumption causing pressure on known resources. The true sustainability of mineral resources, however, is a much more complex picture and involves exploration, technology, economics, social and environmental issues, and advancing scientific knowledge—predicting future sustainability is therefore not a simple task. This paper presents the results from a landmark study on historical trends in Australian mining, including ore milled, ore grades, open cut versus underground mining, overburden/waste rock and economic resources. When complete data sets are compiled for specific metals, particular issues stand out with respect to sustainability—technological breakthroughs (e.g. flotation, carbon-in-pulp), new discoveries (e.g. uranium or U), price changes (e.g. Au, boom/bust cycles), social issues (e.g. strikes), etc. All of these issues are of prime importance in moving towards a semi-quantitative sustainability model of mineral resources and the mining industry. For the future, critical issues will continue to be declining ore grades (also ore quality and impurities), increased waste rock and associated liabilities, known economic resources, potential breakthrough technologies, and broader environmental constraints (e.g. carbon costs, water). For this latter area, many companies now report annually on sustainability performance—facilitating analysis of environmental sustainability with respect to production performance. By linking these two commonly disparate aspects—mining production and environmental/sustainability data—it becomes possible to better understand environmental sustainability and predict future constraints such as water requirements, greenhouse emissions, energy and reagent inputs, and the like. This paper will therefore present a range of fundamental data and issues which help towards quantifying the resource and environmental sustainability of mining—with critical implications for the mining industry and society as a whole.     

The role of price expectations and legal uncertainties in ocean mineral,exploration activities

In this paper, a standard exploration activities model is modified and applied to time series, data from deep seabed mining of a group of minerals where the number of patents is used as a proxy, for the level of mineral exploration activities. In addition to the rational expectations model, price, expectations formation for mineral prices is decomposed into trend and cyclical components using the, HP-filter method. Estimated parameters from the supply and cost functions are used to determine the, shadow price of the minerals. The non-linear instrumental variables estimator is employed to estimate, the exploration activities function. While the rational expectations model shows the importance of, current prices on exploration efforts, the HP-filter model suggests that firms concentrate on the trend, in prices rather than the short-run cyclical fluctuations. Also, while the U.S. refusal to ratify the LOSC, has increased the legal uncertainties surrounding the management of ocean resources and reduced the, incentive to engage in exploration activities, the passage of the ISA's main legislative accomplishment, regarding regulation of the explorations for polymetallic nodules appear to have made a positive effect.     

Impact of different public E&P policies on natural gas reserves and production in Pakistan

Low wellhead domestic gas prices over the past few years have led to the beginning of a shortage in natural gas reserves and production in Pakistan. Gas demand steadily rises in all sectors for being an economical fuel as compare to substitutes. In the view of foregoing consumption trend, the demand for gas is expected to grow with a higher pace during the 2010s. On the contrary, indigenous gas reserves are running out and cannot keep up with the demand. This paper examines the extent of upstream activities in different petroleum policy regimes. The wellhead price for indigenous gas is compared with the prices of alternatives (for example, gas import prices). In order to put the problem in perspective, the relationship between wellhead gas price and cumulative gas reserves in Pakistan are analyzed and we find that the looming gas shortage can be ameliorated in the short-run and eliminated in the long-run through incentivized wellhead price. To put it briefly, the idea is mooted to first take advantage of huge domestic reserves to ensure competitive consumer prices for gas. The findings are applicable to several other economies with under-developed natural resources.     

The legal environmental risk analysis (LERA) sample of mining and the environment in Turkish legislation

As advancing technology and increasing demands for natural resources continue to mount pressure on the environment, environmental conservation and sustainable management have become ever more important. Individual countries have been increasingly taking action to reduce environmental destruction caused by human activities in an attempt to find a balance in between the necessary exploitation of resources and environmental conservation. In Turkey, the struggle between environmental conservation and mining activities is set within the legal context, with the requisite legal regulations (which describe various procedures) in the midst of being updated or renewed. The legal environmental risk analysis (LERA), beginning by discussing the main legal regulations of environmental conservation in relation to mining activities, defines basic environmental components which form the basis of environmental conservation in relation to mining, and analyzes the impact of mining on each component. The analysis (LERA) finishes with an evaluation of the components as they currently stand and makes some suggestions for the improvement of insufficient regulations.     

The significance of futures trading in minerals and oil

Futures trading has been introduced for aluminium and oil in recent years and the range of contracts available on various minerals and oil products continues to widen. Concern has been expressed by producers of a number of minerals, including nickel and platinum, that the introduction of futures trading may introduce a speculative element to price determination that will create inappropriate or excessively volatile prices. It is the purpose of this article to analyse the role of futures trading in relation to trade in underlying commodities in general and especially for trade in minerals and oil. Evidence from oil and platinum markets, in particular, is adduced and examined in the light of earlier evidence of the influence of futures trading on underlying commodities. The contribution of futures trading is examined in detail and conclusions are reached on the significance of futures trading for minerals and oil.