mining’s contribution to sustainable development trends and conflicts in the extractives sector:...
TRANSCRIPT
Mining’s contribution to sustainable development
Trends and Conflicts in the Extractives Sector: Designing Public Policy for a More Sustainable FutureRio+20Tuesday 1 June 2012.
Ben Peachey, Director, International Council on Mining and Metals
ICMM at a glance
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Over 800 sites in 62 countries
CEO led
22 Company members
34 Association
members
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ICMM member companies
Enhanced transparency and accountability
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Robust entry criteria and process
Clear performance expectations
Reporting
Better decision-making
Enhanced Trust
Transparency and
accountability
The value proposition of enhanced transparency and accountability
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Mining sector risks... and opportunities
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Commodity price Interest rate risks
Currency Risks Equity risks
Political instability War/civil disturbance Expropriation Breach of contract
Life cycle aspects, e.g. recyclability, disposal
Chemicals management/ inherent HSE risks
Supply/value chain Market access
Business interruption H&S and ESG Failure of systems Regulatory non-
compliance
Resource access – land, energy, water
Access to capital & talent
Climate change Reputation
Material issues – 2011 SD reports
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% o
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Reality check: key trends
Intensifying political struggles over distribution of resource rents
Increased emphasis on corporate social and environmental practices
Increased NGO campaigning on a range of issues (community consent, ethical sourcing, biodiversity, energy minerals, chemicals management)
Increasing complexity and breadth of issues facing the industry
Growing recognition that no single interest can address issues effectively (growing need for multi-interest collaboration)
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Increasing public concerns (climate change, water, human rights, biodiversity, corruption and transparency, workplace fatalities, distribution of economic benefits of mining, poverty reduction, indigenous peoples’ role in decision-making)
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Source: OPM and ICMM
1. Strong demand continuing – with some bumps and supply challenges
2. Poor or middle income countries dominate the top 30 national mining and metals economies – increasing dependency
3. From global production perspective, higher and high middle-income countries dominate
4. Schedule/cost over-runs remain significant – community and civil society resistance a key factor in commissioning delays
73% of project delayed
Conflict on the increase
What is fair?
Operating environment – key trends
Understand the contribution
1. Costs + Risks
2. Benefits
3. Responsibilities
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Understanding the benefits (1)
Foreign Direct Investment Mining FDI often dominates the total flow of FDI in low income economies
that have only limited other attractions for international capital
ExportsMineral exports can rapidly rise to be a major
share of total exports in low income agrarian economieseven when starting from a low base.
Government RevenueMineral taxation has becomea very significant source of
total tax revenues in many such economieswith limited tax raising capacity .
National Income (GDP & GNI)Modern-day mining technology
is sophisticated, so most upstream value addition takes place outside the host country
Employment This is also low –
typically only 1-2% of total
Employ-ment
60% - 90%
30% - 60%
3% - 20%
3% - 10%
1% - 2%
Understanding the benefits (2)
Economic
SocialCultural
Environ-mental
Towards integrity, trust and strengthened reputation
Restoration ecology
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From the dark side to a positive agent of social change
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