Sustainable Minerals Operations in the Developing ...

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A particular problem can be compe- tition for land between legal major operations and informal artisanal mining (Davies &. Osano, Eshun). Economic aspects.

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Sustainable Minerals Operations in the Developing World: introduction B. R. M A R K E R a, M. G. PETTERSON 2, F. M C E V O Y 2 & M. H. S T E P H E N S O N

1Office of the Deputy Prime Minister, Eland House, Bressenden Place, London, SW1E 5DU, UK 2British Geological Survey, Nicker Hill, Keyworth, Nottingham, NG2 SGG, UK

Sustainable development requires an appropriate balance between social, economic and environmental well-being, now and for the future. Since most minerals are non-renewable resources, sustainability of supply can only be addressed by extracting, processing and distributing raw materials in the least environmentally damaging ways, using minerals wisely, and recycling as much as possible. However, there also is significant scope for improved sustainability in terms of economic and social aspects. Minerals are essential raw materials but highquality deposits have become depleted in many developed countries. These countries have increasingly turned to developing countries for supplies and it is in these that most high-quality untapped future prospects remain. For countries with limited export opportunities, minerals are often a mainstay of the domestic economy. However, low selling prices may reflect limited environmental regulation and low wages. This can lead to charges that the rich countries are exporting their environmental damage to, and exploiting, poorer countries. As more countries develop, the global demand for supplies of essential raw materials increases, and resources will be depleted more quickly. Therefore, sustainable minerals supply from the developing countries is an important global issue. In this Special Report, general aspects of sustainable minerals operations in the developing world are reviewed by Petterson et al., Hobbs, and Richards while the remaining papers consider specific issues in more detail. Hobbs, in particular, emphasizes the need to give proper weight each to human capital, financial capital, manufactured capital, and environmental capital in any full analysis as a context for sustainable development and effective aid.

Geographical coverage The included papers highlight the diversity of sustainability issues in parts of Africa (Davies

& Osano, D'Souza, Eshun, Mitchell, Nyambe & Kawamya), A s i a (Akhtar, Hussain, Mishra), the Pacific (Carvalho & Lisboa, Tolia & Petterson, Whitmore), and Jamaica (Harrison et aL). Some comparative material from parts of Europe is also included (Scott et al., Shields & Solar, van der Meulen). Scale of extractive operations Minerals operations in the developing world are varied. Papers in this report consider all scales including: (a)

major underground and open-pit mines run by international corporations, which are particularly vulnerable to changes in world commodity prices and investment opportunities (Richards, Tolia & Petterson,

Whitmore); (b) (c)

substantial mines and quarries operated by major national firms (Mishra); and smaller scale mines and quarries run by local firms (especially Harrison et al., Mitchell), and informal or 'artisanal' mining, often undertaken without regulatory permission by local people (especially

D' Souza, Eshun, Hussain). Carvalho & Lisboa, and Stephenson & Penn concentrate on medium-sized to artisanal operations, while Akhtar, Nyambe & Kawamya, and Davies & Osano consider all three levels. It is a fact of life that significant numbers of people have to work in artisanal mining because of a lack of any other means to earn a livelihood (Hussain, Eshun). D'Souza makes it clear that artisanal mining can support very large numbers of people, directly or indirectly, and fully or seasonally, in areas that are otherwise at poverty level. However, he makes it clear that artisanal mining is not a single phenomenon and may range from ephemeral to permanent operations. Because of this wide range in scale, investment, plant and machinery, techniques, education, and training, there can be

From: MARKER,B. R., PETTERSON,M. G., McEvoY, F. & STEPHENSON,M. H. (eds) 2005. SustainableMinerals Operations in the Developing World. Geological Society, London, Special Publications, 250, 1-4. 0305-8719/05/$15.00 9 The Geological Society of London 2005.

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no 'one size fits all' solution to problems of sustainability. A particular problem can be competition for land between legal major operations and informal artisanal mining (Davies &

Osano, Eshun). Economic aspects There is often an emphasis in developing countries on attracting international investment in large-scale minerals operations, rather than developing smaller scale enterprises to meet local needs, because of lack of local investment capital (Akhtar), the need for foreign exchange (Nyambe & Kawamya), and lack of internal infrastructure or of local markets, which inhibit smaller operations in remote locations (Hussain, Davies & Osano, Carvalho & Lisboa). Therefore, the contribution to GDP from minerals operations, while valuable, is often lower than it could be (Hussain). In particular, there are limited facilities for 'value added' manufacturing, so much of the 'downstream' wealth is realized in other economies (D'Souza, Hussain). In respect of large-scale mining enterprises, an important factor is the attractiveness or otherwise of countries to international mining companies. The ambient regulatory and fiscal regime may deter or encourage exploration and development. There may be an economic need for governments to take steps to liberalize administrative processes, but that may work counter to sustainable development (Nyambe & Kawamya) and the interests of indigenous peoples in particular (Whitmore). Particular problems for small-scale and artisanal mining include: 9 9 9 9

inability to borrow money because of lack of collateral (D'Souza, Hussain); lack of training in marketing skills such that middle men buy cheaply and make the profit (Hussain); lack of clear business plans and weak 'project ownership' (Stephenson & Penn); and lack of technical expertise, especially on mineral resource evaluation and processing, and availability only of outdated equipment (Hussain, Davies & Osano)

In these circumstances, a crucial step towards improvement is the development of appropriate funding and support models (Nyambe & Kawamya) to secure proper investment in plant and equipment, alongside capacity building. However, circumstances are sometimes extreme, for instance when trying to rebuild small

local mining industries, while attempting to diversify and extend operations to contribute to rebuilding a post-conflict economy (Carvalho & Lisboa). Despite such limitations, there may be opportunities for diversification, for instance in the gemstone and industrial minerals sectors in Zambia (Nyambe & Kawamya), development of niche products such as agricultural lime (Mitchell), or greater use of mineral wastes where processing costs permit. While mining wastes containing rare and valuable minerals are attractive already, at least to artisanal miners, there is scope for more use of lower priced commodities in local economies (Scott et al. ).

Social aspects There are strong social issues surrounding sustainable minerals operations in the developing world. Medium- to large-scale mining was largely undertaken by companies from the developed countries but often operating to lower standards in terms of matters such as health and safety than they would in their own countries, and paying low wages, leading to criticisms of exploitation. In recent years, many major companies have taken steps to address these issues (see below). Even so, major mining proposals can significantly affect people through displacement of communities (Mishra, Whitmore). However, small-scale and artisanal mining was, and remains, a dangerous activity linked to poverty and ill health (Eshun), the exploitation of women, and use of child labour (D'Souza). Tensions may exist between major minerals operations and small-scale miners who compete for the same land (Richards). There is a clear need for support, training, education and, overall, holistic capacity building

(D'Souza, Eshun, Hussain, Nyambe & Kawamya, Stephenson & Penn) including engagement with government, industry, nongovernmental organizations (NGOs), landowners and, crucially, local communities and their traditional authorities. However, that requires, in turn, willingness and commitment on the part of miners and their dependents (Eshun). A particular problem is the lack of materials in local languages (Hussain). However, overall, views of stakeholders should influence the ways in which aid and assistance are provided (Hobbs, Stephenson & Penn) and whether, or not, mining should proceed (Whitmore). Holistic capacity building is important at all levels - government, industry, landowners communities. But the necessary information,

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INTRODUCTION education experience and training is impaired by insufficient budgets (Stephenson & Penn). Stakeholder views should influence the way that aid is provided. Communication is also of importance in relation to proposed major mining. For example, Tolia & Petterson review issues involved in community consultation on a major mining proposal in a tribal area of the Solomon Islands with no previous experience of the industry and different land ownership concepts. Negotiations were undertaken with all stakeholders and agreement was secured on the basis of a compensation 'package' including money at the outset and during the life of the operation, provision of relocation and commercial land, social and educational and infrastructure facilities, and, wisely, the basis for investment in skills and occupations for the post-mining phase. In contrast, Whitmore gives examples where corporate policy may have been poorly communicated or lacking in flexibility.

Richards emphasizes the need for all mining operations to internalize environmental costs, but, while environmental management schemes are now commonplace in large companies, there is a long way to go before this can be carried through to smaller formal operations (Richards). Meanwhile, in the artisanal sector, it is probably not possible to make significant environmental progress until the social and economic aspects have been addressed (Nyambe & Kawamya).

Regulation and governance The regulatory situation is very variable. This ranges from: (a) (b)

Environmental aspects The environmental impacts of mining and quarrying, including land degradation and emissions, are well known and have been particularly severe where environmental management systems and restoration procedures are not in place (Mishra). In recent years many major mining corporations have re-examined their operations in terms of corporate and social responsibility (Richards), for instance through the Global Mining Initiative of the 1990s and World Bank Extractive Industry Review of 2004. This has led to the recognition of the importance of good governance and observance of human rights in this sector, as well as introducing social and environmental safeguards (Hobbs). However some groups representing indigenous peoples feel that the views of those people have often been overlooked in this process (Whitmore). There are also encouraging examples within developing countries of national operations making strong efforts to improve environmental performance (Mishra). To take a specific example, Harrison et al. review practices in river mining of sand and gravel for construction in Jamaica. These operations give rise to bank erosion, increased flooding and damage to ecosystems. There is a clear need for environmental impacts assessment, a sound code of practice, and technical improvements. However, it will not be easy to implement these without a significant capacity-building initiative.



a lack of public policy in post-conflict situations (Carvalho & Lisboa); old legislation that was fashioned for colonial mining, essentially favouring foreign companies, rather than modern circumstances (Eshun), and which may have little regard for environmental issues (Davies & Osano); or new national laws that are not transposed into regional or local law, are difficult to enforce in remote and difficult terrain, and which may be cumbersome, 'non-transparent' and poorly applied due sometimes to the in experience of officials (Hussain) and which may favour corporate interests over those of local people (Whitmore).

While there have been some attempts to make artisanal mining illegal, these regulations, in particular, are seldom enforceable and stand in the way of dialogue and improvement (Davies & Osano). Therefore, an important aspect is the need to regularize illegal artisanal mining operations so that the lives of miners and their dependents can be improved and concepts of sustainability can begin to be introduced

(Eshun, Nyambe & Kawamya, Davies & Osano). A paper from van der Meulen sets out recent changes to Dutch national mineral planning practices to illustrate that well-intentioned approaches to the supply of construction aggregates are not necessarily successful when the public opposes extraction. That is a common feature in developed countries, but it is less widely appreciated that it can also be a factor in developing countries (Davies & Osano). Caution is needed in attempting to transfer experiences in minerals planning from one place to another.

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Monitoring and assessment It is difficult to measure sustainability (Richards). However, key steps are to assess the contribution that sustainable development can make to an economy, to set out a plan of action towards improvement, to monitor progress, and to reassess the initiative as time passes. Shields & Solar point out that approaches often over- or under-emphasize the influence of the minerals industry on economic growth when considering the balance between income growth and alleviation of poverty. It is important to weigh social equity, environmental health, and economic growth as a basis for managing change. To that end, they present a sustainable resource management model for minerals development, and aggregates in particular. O'Regan & Moles focus on computer modelling of the effects of economic, fiscal and corporate policies on the flow of investment funds and the development of mineral resources as a basis for assessing perceived investment risks with particular reference to base metal mining.

Conclusion Some key points that emerge from the Report are that: 9



the emphasis in many developing countries on earning revenue from mining operations of international companies may work against the development of a minerals supply to local markets and 'value added' manufacturing; major mining companies have done much in recent years to review their operations and to introduce better codes of practice, but much remains to be done at all levels, especially in the small-scale and artisanal sectors; improvement requires good dialogue between all stakeholders at all stages of minerals operations, from exploration to rehabilitation and, ideally, with investment from revenue






gained from mining in post-mining employment opportunities; regulations need to be fitted to the circumstances, but are only effective if they are implemented by suitably experienced administrators; key stakeholders are largely trying to do the right things, but within a dauntingly complex situation; circumstances vary greatly from area to area, so there is no 'one size fits all' approach to improved sustainability; it is important to properly analyse and to monitor approaches towards more sustainable development; however, the first priority in the artisanal sector is to regularize operations so that improvements can be sought, rather than marginalizing these as illegal activities; and good dialogue and coordination is needed between all interested parties, especially local communities, so that issues can be addressed positively, while avoiding unintended consequences.

History tells us that artisanal mining tends to a build to a medium scale and then, later, to large-scale mining enterprises accompanied by growing awareness of good practices. The question is how to accelerate that process in the developing countries to the well-being of all concerned and their environments. The conference that gave rise to the papers contained in this Special Report was convened by the Joint Association of Geoscientists for International Development in collaboration with the Environment Group of the Geological Society and the British Geological Survey. Thanks are due to the following organizations that supported the conference, particularly those who helped to pay for speakers from developing countries to attend: Department for International Development (UK), Anglo American plc, Rio Tinto plc, Wardell Armstrong plc.

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