Vancouver workshop discusses resource governance

B.Tugsbilegt  /April 24-25 in Vancouver, Canada/

There cannot be ‘one recipe’ for good resource governance in all countries with mineral wealth, given their variety, but most such countries can, and are trying to, improve their governance practices. That is the impression this reporter gathered at the CIRDI (Canadian International Resources and Development Institute) workshop on Leading Practices in Mineral Resource Governance, held on April 24-25 in Vancouver, Canada. Officials and non-officials from 13 countries -- Argentina, Peru, Ecuador, Senegal, Sweden, Mongolia, Guyana, Chile, Ethiopia, Vietnam, Colombia, Kenya, and Canada -- participated in the workshop, exchanging experiences. Some of them are in an initial stage of developing their mineral sector, while some others are in an advanced stage of such development. 

Mongolia’s mining sector will be the main pillar of its economy for the foreseeable future. Minerals and oil exports bring in over 90 percent of the country’s foreign earnings and by far most of the foreign investment is in the mineral sector. Altogether, resource governance is not bad in Mongolia -- we were put at the 15th place among 89 countries in the NRGI Resource Governance Index 2017 -- but the people view the sector with suspicion, mainly because the information they have is inadequate and incorrect. The result has been that most aimags and local communities do not welcome fresh exploration work.    

One way of gaining popular support could be to follow the examples of Peru and Argentina, both of which are focused on environmental management. This is a relatively new understanding of resource governance, giving importance to sustainability and human satisfaction.

Mongolia has been trying to find the best way to share the revenue from the mineral sector with the people, given that all aimag governors have been vocal about not getting any benefit from the mining-related activities in their territory. From next year the entire fees paid to receive an extraction licence will go to local budgets, instead of the present 50%. Since this might not be enough for local communities, it is likely that once the IMF programme ends, they will also get a larger share of mineral royalties. 

Use of water in mining is a problem everywhere, and a case study from Peru, which is the world’s second largest exporter of copper, was educative. Cerro Verde is a copper mine there, 34 km south of Arequipa city and in the Atacama desert. Access to water was not easy for the mine owners, Freeport McMoran. Finally, the company built a facility in 2015 at a cost of $550 million, and with an initial capacity to treat 1.8 cubic metres of water per second, with provision for expanding it. The facility also treats 85 percent of Arequipa’s wastewater. The cooperation between the company and the regional government has solved the municipal water pollution problem and allowed the mine to use additional water without depleting the source. 

Argentina has a diversified economy, relying equally on agriculture and oil and mineral resources. CIRDI is supporting the country in taking up a good mine closure policy. The country’s first big mines to be closed next year are a copper-gold project in Catamarca, and two projects in Santa Cruz -- the Cerro Vanguardia gold and AngloGold Ashanti silver projects. In a bid to ensure an economically, socially, and environmentally sound closure, a series of trainings and workshops have been organized since 2016 for all stakeholders.

As for Canada, its main concerns are quite different from what we have in Mongolia. They are aiming to maximise the benefits indigenous people will get from the mineral sector. A highly developed country, Canada is always trying to adopt better resource governance practices, especially in regard to the environment. It has now joined countries like Great Britain and South Africa, and also some US states, in imposing a carbon tax. Australia could also get the tax soon. 

Ethiopia is now implementing an ambitious five-year (2016-2021) project for capacity building among the staff of the country’s ministry of mines, petroleum and natural gas. The mining sector there is yet to take off, except for some gold and limestone projects. When development really begins, the Ethiopian government wants to be ready with a modern framework and adequate geoscience information.

CIRDI has been implementing capacity building projects in 22 countries over the last six years.  As mentioned earlier, resource governance does not have to follow the same course in all countries, but its basic elements -- sustainability, inclusiveness, and transparency -- should be the same everywhere.

The biggest challenge to resource governance now comes from climate change. The sector must become more responsible in terms of emission, and also make sure of uninterrupted supply of strategic minerals including rare earth elements for clean technologies. New technological developments such as artificial intelligence bring in both opportunities and challenges for good resource governance.