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ATPS Executive Director, Prof. Urama Kevin Chika, exhorts Governments and Mining companies to consider the Environmental Infrastructure – Land, Water and Ecosystems in Mining Operations

Speaking at an Expert Roundtable hosted by the World Bank Group and Australian Aid at the ongoing mining Indaba in Cape Town, South Africa, Prof. Urama encouraged governments and mining companies to explore the nexus amongst mining operations and environmental infrastructure – land, water and ecosystems, stressing that the latter is the mega-structure that will sustain mining business and profitability in the long run.

The rush for minerals and energy in Africa is driving increased expansion of investments into remote areas in the continent, hence delivering multiple economic development benefits in rural communities, said Prof. Urama. However, the focus on optimizing the volume of minerals extracted and mining revenues has left a legacy in which mining is largely associated with fundamental changes in the natural environment, community structure and cohesion, increased competition for and degradation of land, water and other resources – affecting rural livelihoods in perse ways.  

This should not necessarily be the case, lamented Prof. Urama. If well designed and managed, the benefits and co-benefits of mining could easily include investments in roads, rails, water and energy, and employment creation in these areas. While the media and the environmental lobby often blame the mining companies for most environmental degradation in mined land, water resources and ecosystem services in and around mining communities, independent empirical research and holistic analyses of the huge potentials for a shared mining infrastructure are only just emerging.  He made reference to ongoing studies developed with his colleagues at Murdoch University in Western Australia and funded by Australia’s AID program, which are exploring various aspects of the nexus: 

  • How can mining and agriculture work together to provide equitable economic opportunities?
  • Using mining infrastructure for broader economic development;
  • Using Mozambique’s natural resource wealth to improve access to water and sanitation;
  • Developing policies to better manage mines, mine closures and mine abandonments; and
  • Human rights and the environmental impact of mining in Africa.

In all these research programs the focus is on creating a better understanding of how the extractives sector can contribute to accelerating sustainable regional economic development in the countries of Africa.  The programs explore the nexus between agriculture and mining in African countries and elsewhere to harness opportunities for “win-win” rather than of competition. “This “fertile partnership” can only be built through win-win collaborations between national governments, mining companies, and citizens”, said Prof. Urama.  Achieving this will require significant transformations in how the business of mining is designed, implemented and regulated, particularly with regard to negotiation and award for mining concessions, national procurement policies, post-mine activity, and leveraged infrastructure – roads, power and water. At each of these stages, all parties must seek to look at the bigger picture and explore measures to marry the different but potentially mutually benefiting goals for each party concerned. This is the only way, “Africa’s mineral endowments can lift the continent out of poverty and catapult it to growth, development, and prosperity for all” – which is the African Mining Vision, he notes. This is doable and achievable, he stressed. 

This is not to underestimate the challenge there is in bridging the historical challenges left by mining history in Africa. One of the legacies of gold mining in South Africa is the staggering amounts of tailings left behind. Many tailings dumps have been inadequately managed, leading to contamination of surface and grown water resources, and also creating health challenges for both humans, livestock, wide life and biopersity.

Sounding an optimistic note, Prof. Urama relayed a story of some good case studies where mining legacies has included regional economic development as well as development of water, agriculture and other ecosystem related infrastructure services through a number of interrelated catalyzing factors. 

First, was the case study of Kalgoorlie Superpit (gold mine), Western Australia. The discovery of gold at Kalgoorlie 110 years ago not only catalyzed an enormous amount of wealth to the economy of Western Australia, it has also shaped the roads and rail networks from Perth to Adelaide, and significant development of agriculture and other economic activities long the extractive corridors in Western Australia. The insistence by the Premier of Western Australia at the time to insist on using local content (skills, materials, etc.,) in the technological revolution that supported the mining activities, has also led to significant technological discoveries, advancements and patents by Australian Engineers who faced the challenges as they emerged. The waited not to have all the “know how” and/or “import” foreign technologies to address the challenges faced in the mining sector. Instead, the Visionary Leaders at the time, planned for the long term. They put innovative policies in place to encourage local content and endogenous skills development, often time even at the dismay of and/or ridicule by the public. I don’t think anybody knew at the time of the commencement of the mining operations, about 110 years ago, that the Kalgoorlie Superpit (gold mine) would take a hundred years to mine the resource resulting in about 3 cubic kilometre hole in the end, but at the same time catalysing significant economic, skills, social, technological, …, development in Western Australia today. It is perhaps not an over statement to say that today, the mining industry has contributed to significant regional economic transformation in Western Australia. The economic and social impacts of mining actives has also occurred along the line, but the Australian government and engineers has continually confronted the challenge with innovation (including technological, institutional governance, social and market innovations), creating numerous patents and good practice policies on how to harness the nexus, sometimes fortuitously.  Grain harvest in 2013 in Western Australia’s “wheat belt” along the corridor was a record 15.1 million tonnes, Western Australia is leading in many mining technologies, …, and the economic fortunes of its population is definitely better than it was 110 years ago. Western Australia has also wised up to new ways of rehabilitating mined areas to restore ‘Jarrah’ forest concurrently as mining operations proceed in a public-owned forest resource. Had I been told this story, I would have had some doubts, but I have been there in person, saw it, and believed.

What is the story? It is possible to have a shared infrastructure for profitable mining business, regional economic development in mining regions, and sustain land, water and ecosystems. 

To achieve this goal, all parties consider the following principles:

  • Visionary Leadership and long term development planning: -  Mining visions, such as the Africa Mining Vision (AMV) can only take firm roots in the “books” of Mining Companies when the Leadership of the country, region or community can “see the future” rather than the “present”. It takes a leader who “sees the future” to say no for development plans and proposals that provides ad hoc solutions to current development challenges by raping the country, region or community of its resources for the future, today. This applies to stewardship to land, water and ecosystem services tomorrow, and also the realisation that the gestation period for technological breakthroughs, and well as sustainable mining infrastructure development are often longer than the “political term” of the Leader (or even in the case of ecosystem resource, far beyond the life time of the currently living). Often times, high discount rates of the poor constraints leaders and citizens in developing countries to “front load” potential benefits and accruals from resource extraction activities today rather than tomorrow. Either way, this can only lead to an “unsustainable business model”. On one hand, the Extractive Industries are either struggling to “get the most of the minerals out today and get out tomorrow”, provided that they meet the often daunting requirements by governments to meet the huge short term financial needs, all be it for good causes: poverty alleviation, health provision, education, etc., while satisfying its investors. On the other, the longer term environmental benefits of sustainable mining including rehabilitation of forests, biopersity offsets, etc., are hardly paid any attention, as these are by nature long term investments. In the final analyses, long term planning for sustainable mining development would require a clear recognition of the fact that the requirements placed on Mining companies must make economic sense, otherwise, no rational investor would venture in.  On the other hand, companies must recognize that sustainable mining is good business – according the company a good corporate image, and reducing end of life expenses in reclamation of destroyed environmental assists.  The environment must be seen and treated as the asset without which mining proceeds are bound to peter off over time.  
  • Policy Innovation and Coordination: Countries and Companies must find suitable policies that would deliver the mutual goal of a sustainable business for the long term plan. The lowest handing fruit in this regard, is fostering dialogue and coordination amongst different policy sectors: agriculture, Land resources, water, environmental, Mines and Industry, etc., need to speak to each other and with the Private sector more proactively to find a win-win. Often times, policy conflicts between related ministries wither mitigates policy implementation and/or erodes the benefits of polices in different sectors. The ecosystem (which I refer to as the environmental infrastructure) is a single system and within it are all the economic activities of human kind: agriculture, mining, water extraction, etc. Continued treatment of the ecosystem as an external system to business can only lead to environmental externalities. Some ecosystem resources are incommensurable and once damaged, are irreversible. So, while end of pipe policies for pollution abatement are necessary, more mileage would be gained if mitigation of potential impacts are made an integral part of business planning and implementation. The age old English saying that “prevention is better than cure” suggests that environmental conservation and mitigation of impacts will be much less expensive than restoration, if built into the business plan ab initio. 
  • Skills and Capacity: Achieving the two recommendations above requires appropriate skills and capacity at all levels: institutional skill and capacity to negotiate mining contracts; develop and implement policies (both incentivising sustainable mining behaviour by firms, endogenous skill development in mining technologies, and also monitor and regulate mining activities and closure, etc. It also requires building a critical mass of local skill base for technology development, adaptation, and deployment, etc. This goes beyond investments in higher education and Mining Engineering Schools. Managing sustainability is a trans-disciplinary challenge and would require both hard and soft skills to deliver on.  There is need for Mining firms to increasingly employ and/or engage other disciplines – resource economists, environmental economists, science and technology experts, agricultural scientists, etc., in addition to regular finds in geology, mining engineering, lawyers, etc. 
  • Appropriate methods to engage local stakeholders : Beyond policy coordination and engaging a broader spectrum of experts, it is of absolute necessity for governments and companies to improve on stakeholder engagement practices. While governments often have the political power to give mining concessions and should, companies need to recognize that more transparency in clenching the deals would invariable de-risk their investments significantly. As the global knowledge platforms become more accessible in various platforms, it has become easy for rural communities to become more and more aware of mining profits, the environmental impacts and the opportunity costs to mining communities, etc. Forestalling potential conflicts up front can only be a good business practice, as it significantly reduces uncertainty. When civil societies and citizens are excluded in the deal making stages of the process, they become more likely to be swayed by the “environmental lobby” who may take “strong sustainability” perspectives to mining operations and hence come in an “attack mode” rather than a discursive mode. 
  • Proactive Investments in the development of extractive corridors: Both national governments and private sector investors should build into the plan, development of the extractive corridors and also harness the business opportunities they offer. The best way to get the poor out of the streets is to create livelihood opportunities: new jobs, access to electricity for self-employment in artisanal sectors and micro-enterprises, water to grow food through irrigated agriculture, etc. Again, the English saying that “a hungry man is an angry man” only buttresses this point. 
  • Technology and innovation cooperation: International investors must consider what forms to technology cooperation works better in target communities. There are cases where “outright transfer” of hardware may be necessary for short term cost effectiveness reasons, but so are there cases where endogenous development of the technology can equally be competitive in the medium term. In all cases, use of local content always pays back in the medium to long term. Governments must find proactive measures for building educational and skills capabilities of its citizens in relevant resource sectors, and liaise with potential investors and/or technology providers to ensure that knowledge/skill sharing is an integral path of mining agreements. Along the whole mining value chain, there MUST be relevance of local skills, knowledge and resources and at cost effective rates. Achieving mutual benefit to all stakeholders must be the win-win principle for sustainable mining business. 

For more about the ATPS and its programs, visit: http://www.atpsnet.org

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Posted on Tuesday 11th February, 2014




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