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Mining for development

 

heading foldHow we are helping

2012/13 Estimated Outcome

$42 million

 

Implementation of the revised 2013–14 budget is currently under discussion with partner governments and organisations.

 

Australia's objective is to support developing countries to maximise the economic benefits from their extractives sector in a socially and environmentally sustainable way.

Investment in mining has grown rapidly in developing countries in response to high commodity prices and the depletion of known reserves in traditional resource provinces. When well-managed, the sector has considerable potential to help reduce poverty, but comes with many challenges. Many resource-rich developing countries perform worse than less-endowed countries on human development indicators.

Australia has invested $105 million in Mining for Development over the previous three years. Some of the key results include establishing the International Mining for Development Centre and enabling citizens to hold their governments to account for mining revenue through our leading support to the Extractive Industries Transparency Initiative.

Australian Aid will continue to work with multilateral organisations, other government agencies, non-government organisations, universities and the private sector to assist partner governments to maximise the development potential of their extractives sectors.

Regulation and governance

Results to June 2012

In the 12 months to June 2012, Australia delivered training to 294 people from 25 developing countries through the International Mining for Development Centre (IM4DC). This included:

  • cadastral management in a GIS environment
  • rehabilitation on mined land
  • occupational health and safety
  • management of large volume waste facilities in mining
  • local procurement.

The IM4DC has also commissioned 11 research projects into mining for development issues, including a good practice guide on the management of occupational health and safety.

Australian funding supported the United Nations Development Programme (UNDP) to develop a methodology for cost/benefit analysis of mine sites. It will support informed policy making for the growing Mongolian mining sector.

In 2010, Australia supported the strengthening of the legal and environment framework around Mongolia’s mining and mineral sectors, by providing targeted assistance for the review and amendment of the Minerals Law 2006.

The Australian Government provided support to mining governance and policy development in Africa. 412 ministers, parliamentarians and officials from 32 African countries participated in mining governance study tours to Australia in 2011 and 2012.

Commitments 2012-13

In 2012-13, the IM4DC will deliver training to over 400 people relating to:

  • governance and regulation
  • community and environmental sustainability
  • operational effectiveness.

Australia will support local authorities to manage groundwater resources in the South Gobi region of Mongolia, a key mining area that is also home to communities of pastoral nomads.

Australia is partnering with the World Bank to implement local procurement frameworks in Liberia and Burkina Faso. The project aims to develop national regulatory and policy guidance to promote procurement from local suppliers to the mining industry.

Australia is supporting the African Union–led implementation of the Africa Mining Vision, including through a recent commitment of $5 million to support the establishment of the African Minerals Development Centre.

Australia is providing $10 million to the Governance Partnership Facility (GPF), a flagship governance engagement activity for the World Bank. GPF has started to work increasingly in the extractives sector, for example strengthening governance and reducing leakages in Indonesia’s non-tax revenue regime (the majority of which is generated from natural resources).

We are working with Geosciences Australia to improve geological capabilities in developing countries. A design is underway for an activity that improves geoscience data management. This will allow partner governments to plan for their long term economic, physical and social needs.

Extractives revenue management

Results to June 2012

Australia is supporting greater transparency in the extractives sectors of resource-rich countries through the Extractive Industries Transparency Initiative (EITI). Since Australia became a major donor to the EITI, 18 countries have achieved compliance with the standard; and the Solomon Islands, Indonesia and the Philippines have committed to implement it. EITI is a combined government, industry and non-government initiative to promote transparency in the payments made by extractives companies to governments.

Australian aid funds the IMF to improve management of natural resource wealth in partner countries. So far it has:

  • developed economic models and training to forecast income from petroleum revenues in Timor Leste
  • facilitated change to processes in Mongolia’s large taxpayer office and revised fiscal legislation
  • reviewed transparency provisions in Sierra Leone’s draft Extractive Industries Revenue Act
  • supported legal drafting of income tax provisions in the Solomon Islands.

Australia has supported the development and dissemination of the Natural Resource Charter, which is a series of economic principles for governments and societies on how to sustainably manage the opportunities created by natural resources.

Australia is helping Liberia to improve revenue collection and management, by providing technical support to establish a Natural Resources Tax Unit within the Treasury.

The IM4DC published a guide to mineral royalties and other mining specific taxes. It reviews various mining revenue collection options to guide governments considering implementing a ‘best practice’ mining sector taxation regime.

Australian aid is providing Australian Mining Awards to over 30 students commencing in 2012. They are studying degrees in fields such as geology, environmental management and engineering.

Australia is working with the World Bank to study the social and economic impact of extractive industry jobs and how the benefits can be maximised. A case study on PNG will be published in the 2013 World Development Report.

Commitments 2012-13

Australia is providing $4.9 million to the World Bank’s Extractive Industries Technical Advisory Facility, which provides short-term, rapid assistance to developing countries to help them understand, negotiate and analyse the complex financial, legal, environmental and related technical aspects of mining agreements.

Australia will host the Extractive Industry Transparency Initiative global conference on 23–24 May 2013 to broaden implementation in the Asia Pacific and consider future directions for the initiative.

$5.65m is committed to providing scholarships and fellowship opportunities in mining related fields in 2012-13.

Through the Australia-Africa Partnerships Facility, Australian aid will:

  • support the governments of Cameroon, Namibia and Uganda to improve their minerals sector tax administration
  • provide technical assistance to the South Sudanese Ministry of Petroleum and Mining.

Australian aid and other donor support to the IMF for managing natural resource wealth in developing countries will:

  • address fragmentation in responsibility for revenue collection in DRC
  • support revisions to the Mining Code in Guinea which will establish more transparent and equitable taxation of the mining sector
  • support legal drafting and fiscal forecasting in Mozambique.

Direct benefits to communities

Results to June 2012

Australia funded the production of a leading practice guide to social responsibility in the mining and metals sector in developing countries.

Through the Public Sector Linkages Program (PSLP), the Australian Government:

  • supported the University of New South Wales to include sustainable development in mining education at the University of the Philippines
  • supported a group of Mongolian journalists to learn about Australian professional practice in mining and journalism so that they can produce more informed reporting and analysis, which will contribute to strengthened government accountability to citizens
  • built capacity of local agencies, individual researchers and government officials to conduct social and environmental impact assessment in Sulawesi, Indonesia.

Australia supported the development of frameworks for mitigation of social impacts in mining affected areas in Mongolia.

The IM4DC produced a good practice guide to social impact assessment in mining.

Commitments 2012-13

The AusAID Development Research Awards Scheme is funding research on:

  • gender and social safeguards in mining
  • the impacts and policy implications of illegal mining
  • issues with seabed mining and implications for countries considering issuing seabed mining licenses.

The Department of Foreign Affairs and Trade is partnering with the Minerals Council of Australia and the University of Queensland to research gender in mining land use agreement making. It will inform strategies for maximising the benefits of mining to women and girls.

The IM4DC will provide short course training to over 400 students in 2012-13. Training will address the cross-cutting themes of:

  • social and environmental safeguards
  • gender
  • transparency.
 

Implementation of the revised 2013–14 budget is currently under discussion with partner governments and organisations.

 

Research overview

As part of Australian aid’s research program, we fund research on mining-related aspects of development, such as gender empowerment, social and environmental safeguards, and good practice in the mining sector.

International Mining for Development Centre Action Research Program

The International Mining for Development Centre (IM4DC) commissions research that supports and complements its education and training program. In 2011-12, $823,755 was spent on research.

The research focuses on identifying and addressing mining for development issues in developing countries. The research aligns with the IM4DC’s key themes of governance and regulation, social and environmental sustainability, and operational effectiveness.

In 2011-12, the IM4DC published research on the following topics:

  • mineral royalties and other mining-specific taxes
  • social impact assessment of resource projects
  • the management of occupational health and safety in the Australian mining industry.

These ‘Australian Practice Guides’ are available from the IM4DC website and have been translated into French, Spanish and Portuguese.

More information

International Mining for Development Centre—Australian Practice Guides [external link]

Developing a cost-benefit analysis of mining sites in Mongolia

Mongolia’s environmental degradation has increased since the 1990s. This is due in part to poor implementation of environmental policies and a lack of transparency in decision-making on commercial developments, including mines.

Because of this, Australia provided $367,032 to the United Nations Development Programme (UNDP) to develop a methodology for conducting cost benefit analyses of mining operations in Mongolia.

The objectives of the research were:

  • to inform policy makers and civil society about the welfare issues and true economic costs of degrading ecosystem services as a result of mining development in Mongolia
  • to demonstrate the value of considering ecosystem services when developing mining projects and maintaining them.

The activity was one of three components of a broader UNDP program, implemented in cooperation with the Mongolian Ministry of Nature, Environment and Tourism.

There was a high level of interest from international and national experts in the activity, reflecting the relevance of the research. Recommendations included further testing and fine-tuning of the existing model. Also recommended was a Mongolian Government review of existing data collection systems at the local and national level, to ensure a greater pool of data for future studies.

As Mongolia still has a lot of strategic decisions to make related to mining, the tool can be an important mechanism to make better informed decisions in the future.

More information

United Nations Development Programme—Mongolia [external link]
Developing a cost-benefit analysis of mining sites in Mongolia—Annual Report 2011

Research on the effects of mining and land use agreements on women

The Department of Foreign Affairs and Trade partnered with the Minerals Council of Australia to commission research that examines the extent to which mining land use agreements with traditional owners and communities facilitate sustainable development outcomes for women and their households.

The research aims to identify the impacts of the agreements and identify best practice approaches with potential to be used by mining companies. It may also inform the department in its approach to delivering aid for the benefit of mining affected communities.

The research is being undertaken by the Centre for Social Responsibility in Mining at the University of Queensland. The department is contributing $181,200 over two years.

Managing Natural Resource Wealth

Through our contribution to the IMF’s Topical Trust Fund on Managing Natural Resource Wealth (TTF MNRW), Australian aid is supporting research on:

  • optimal rates of saving and expenditure from resource revenues, with the aim of producing guidance for governments
  • mining tax administration to inform the development of a manual for administering mining tax revenue
  • natural resource asset and liability management, to produce a handbook for developing countries.

Australian aid is a leading donor to the TTF MNRW, providing approximately one fifth of its resources. The research budget of US$253,000 is small relative to the technical assistance and capacity building activities that the research aims to inform and assist.

More information

IMF Topical Trust Fund for Managing Natural Resource Wealth

 
 

heading foldWhy we give aid

quote

Mining in developing countries is inevitable; it is happening and at an increasing rate. The mining sector has considerable potential to help reduce poverty, but comes with many challenges. In fact, many resource-rich developing countries perform worse than less-endowed countries on human development indicators.

Australia aims to support developing countries to maximise sustainable benefits from mining while helping them overcome the challenges.

Find out more about why we support mining for development

 
 

heading foldHow we give aid

We work with multilateral organisations, other government agencies, non-government organisations, universities and the private sector to assist partner governments to maximise the development potential of their extractives sectors. Our activities focus on strengthening the capacity of governments in Africa, Asia and the Pacific.

Find out how we support mining for development

 
 

heading foldProgress Against MDGs

Mining can influence achievement of all MDGs to varying extents. There are some possible negative impacts of mining, which the Mining for Development program aims to ameliorate; for example, if managed poorly, mining can hinder progress against MDG 7 (environmental sustainability). On the other hand, there are potential positive impacts of mining that the Mining for Development program aims to enhance. For example, mining can create employment opportunities and contribute to progress against MDG 1 (end poverty and hunger).

 
 
 
 
 

Last reviewed: 28 January, 2014