The evolution of the Canadian mining industry: The role of regulatory punctuation

In this study, we analyze the evolution of Canada's mining industry from 1929 to 2006, focussing on the determinants of the number of firms in the industry and why this number changed over that period. Most empirical studies of industry evolution have focused on manufacturing industries that share similar structural characteristics. Perhaps because of this, extant models of industry evolution tend to ignore industry-specific and national-specific factors that can cause atypical trajectories, that is, heterogeneous industry evolution. Initial inspection of the Canadian mining industry shows that it is atypical in that it exhibits “negative skew” over time in the number of firms rather than the typical “positive skew.” We review two dominant theoretical approaches to industry evolution: the density-dependence theory and variants of industrial organization economics. We also consider possible sources of industry evolution heterogeneity, focussing particularly on “regulatory punctuation”. Using Canadian mining data, we find that the traditional models do not fully explain the changes in population size in Canada's mining industry. As a result, we introduce a number of hybrid models. The results from these hybrid models suggest that Canadian-specific regulatory punctuations, particularly the introduction of significant new taxes, environmental legislation, and incentives have shaped the trajectory of mining firm participation.     

Is corporate social responsibility possible in the mining sector? Evidence from Catalan companies

This paper examines the role and diffusion of corporate social responsibility (CSR) management, especially in relation with the adoption of other management systems, in small and medium sized companies in the surface mining industry in Catalonia (Spain). Specifically, it identifies the most salient CSR practices, procedures and metrics and the profiles of companies more prone to adopt them. To fulfill this aim, a survey has been conducted. Results show that mining companies are familiar with CSR practices, but there is not much formalization of procedures and measurement systems of CSR yet. Results show that the majority of socially responsible practices are related to environmental issues and therefore there is a relation between CSR and the application of environmental management systems. The analysis reveals that the management of CSR activities improves with the diffusion of knowledge on CSR practices. A second survey collected the opinion of professional associations in the sector. Respondents indicate that an improvement in CSR management will lead to a better global competitive position.     

Some observations on copper yields and ore grades

The paper examines trends in the average copper content of mined ores over the years. It has tended to decline over the long term, but by no means evenly. US averages are not typical of global averages, at least in the past four decades. Those have been both higher, and less volatile than in the US. One reason for falling averages is a change in the type of deposit mined, with a rise in the share of relatively low grade porphyry deposits. The different nature of their deposits is reflected in marked differences in grades between the different continents. African and Australian average grades are higher than the global average, and changes in the share of Central Africa in global output have affected the global average grade. Yields are have been consistently lower in North America than elsewhere, and Latin American average grades have trended downwards, reflecting both the ageing of mines and the rising share of production from porphyry deposits. Typically the yield of mines declines over time as mining proceeds. The average copper content of ore deposits is usually below the average yield of the ore accessed in the early years of production. The initial grades of new mines have not declined over the past forty years, and there has been no perceptible tendency for the average grade of porphyry deposits brought into production to decline over time. There is no apparent correlation between average grade and deposit size, but mine operators tend to exploit economies of scale to offset low grades. The relationship between the annual percentage yields (the head grade) and the reserve grades of deposits is not static. In recent years head grades have fallen closer to reserve grades. The relationship may be affected by movements in metal prices. Although the evidence about the influence of prices is not clear-cut, it does suggest that prices and cut-off grades may be inversely related. As many ores contain other valuable metals besides copper, copper yields will sometimes be subordinated to the extraction of these other metals. Copper equivalent grades have not moved in the same way as copper grades alone.     

Corporate Social Responsibility in the extractive industries: Experiences from developing countries

This paper introduces a special issue on ‘Corporate Social Responsibility in the extractive industries: experiences from developing countries’. Drawing upon case study analysis from Latin America, sub-Saharan Africa and Asia, the papers in this issue broaden understanding of how multinational mining and oil and gas companies have embraced the CSR challenge and responded to criticisms of their performance in developing countries. This paper provides an introduction to the debate on CSR in the extractive industries in developing countries, reviewing the key issues examined on this subject to date.     

Evaluating mine plans under uncertainty: Can the real options make a difference?

Over the last few years, many studies have presented the real options valuation (ROV) as a promising technique of valuing natural resource investments under conditions of uncertainty. Apart from the common conclusion that the ROV is better than the conventional net present value (NPV) method in integrating the value of management flexibility and proper handling of cash flows risk, there is a lack of procedures for testing the usefulness and advantages of the ROV over the static NPV method in practice. Arguably, it is not yet clear whether the ROV can deal with the complexity of mining projects and whether it can really be applied to make decisions that improve project value.     

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.     

Optimization of mining by application of the equality principle

This paper shows how the equality principle can be applied to traditional mining activities as a theoretical economic basis for “environmentally friendly” waste management of natural resources. A cost structure is proposed to generally improve the exploitation of the natural resources and save energy due to the promotion of corporate economic incentives to a more cost-effective waste management related to these resources. The methodology proposed is based on the cost-benefit analysis concept. It employs the previously introduced equality principle and the model for Efficient Use of Resources for Optimal Production Economy (EUROPE) featuring shadow prices so as to optimize the mining slope and the ore-concentration when utilizing the resources of the rock and provide management with a one digit indicator of the performance of a certain mining activity to get in just once glance an instant comprehension of their mine's overall performance. This approach simultaneously improves the profitability, the technology used and the environment. A case study presents the practical application of the proposed theory on a Swedish copper mine. It is concluded that the presented methodology improves the exploitation of natural resources in mainly technological, economical and environmental terms. The methods that are developed are regarded as being suitable information support tools for decision-making in waste management and optimization of the exploitation of natural resources in the corporate and public context.     

Exceptional responders in conservation

Conservation operates within complex systems with incomplete knowledge of the system and the interventions utilized. This frequently results in the inability to find generally applicable methods to alleviate threats to Earth's vanishing wildlife. One approach used in medicine and the social sciences has been to develop a deeper understanding of positive outliers. Where such outliers share similar characteristics, they may be considered exceptional responders. We devised a 4‐step framework for identifying exceptional responders in conservation: identification of the study system, identification of the response structure, identification of the threshold for exceptionalism, and identification of commonalities among outliers. Evaluation of exceptional responders provides additional information that is often ignored in randomized controlled trials and before–after control‐intervention experiments. Interrogating the contextual factors that contribute to an exceptional outcome allow exceptional responders to become valuable pieces of information leading to unexpected discoveries and novel hypotheses.     

Effectiveness of protected areas for vertebrates based on taxonomic and phylogenetic diversity

Establishing protected areas is the primary goal and tool for preventing irreversible biodiversity loss. However, the effectiveness of protected areas that target specific species has been questioned for some time because targeting key species for conservation may impair the integral regional pool of species diversity and phylogenetic and functional diversity are seldom considered. We assessed the efficacy of protected areas in China for the conservation of phylogenetic diversity based on the ranges and phylogenies of 2279 terrestrial vertebrates. Phylogenetic and taxonomic diversity were strongly and positively correlated, and only 12.1–43.8% of priority conservation areas are currently protected. However, the patterns and coverage of phylogenetic diversity were affected when weighted by species richness. These results indicated that in China, protected areas targeting high species richness protected phylogenetic diversity well overall but failed to do so in some regions with more unique or threatened communities (e.g., coastal areas of eastern China, where severely threatened avian communities were less protected). Our results suggest that the current distribution of protected areas could be improved, although most protected areas protect both taxonomic and phylogenetic diversity.     

Positive framing does not solve the tragedy of the commons

We investigate whether positive framing increases cooperation in three social dilemmas with slightly different properties: a linear public goods (PG) game, a non-linear PG game, and a common pool resource (CPR) game. Results from our laboratory experiments show that contributions to a linear PG are higher if the externality is framed positively, rather than negatively, corroborating earlier findings by Andreoni (1995). By contrast, we find no such framing effects in the non-linear PG game or the CPR game. In these games, the best response in the material payoffs is to contribute less if others contribute more, counteracting effects of pro-social preferences. Positive framing therefore does not help to solve the tragedy of the commons.