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Mining’s contribution to
sustainable development
Trends and Conflicts in the Extractives Sector: Designing Public
Policy for a More Sustainable Future
Rio+20
Tuesday 1 June 2012.
Ben Peachey,
Director, International Council on Mining and Metals
ICMM at a glance
CEO led
22
Company
members
34
Association
members
Over 800 sites
in 62 countries
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ICMM member companies
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Enhanced transparency and accountability
Robust entry criteria
and process
Clear performance
expectations
Reporting
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The value proposition of enhanced
transparency and accountability
Better
decisionmaking
Transparency
and
accountability
Enhanced
Trust
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Mining sector risks... and opportunities
 Life cycle aspects, e.g.
recyclability, disposal
 Political instability
 Chemicals management/
inherent HSE risks
 Supply/value chain
 Market access
 Expropriation
 War/civil disturbance
 Breach of contract
 Business interruption
 Resource access –
land, energy, water
 Access to capital &
talent
 H&S and ESG
 Failure of systems
 Climate change
 Regulatory noncompliance
 Reputation
 Commodity price  Currency Risks
 Interest rate risks  Equity risks
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% of reports identifying issues as material
Material issues – 2011 SD reports
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Reality check: key trends
Increasing public concerns (climate change, water, human rights,
1
biodiversity, corruption and transparency, workplace fatalities, distribution of
economic benefits of mining, poverty reduction, indigenous peoples’ role in decisionmaking)
Intensifying political struggles over distribution of
resource rents
2
Increased emphasis on corporate social and
environmental practices
3
Increased NGO campaigning on a range of issues
4
(community consent, ethical sourcing, biodiversity, energy minerals, chemicals
management)
5
Increasing complexity and breadth of issues facing the
industry
6
8
Growing recognition that no single interest can
address issues effectively (growing need for multi-interest
collaboration)
Operating environment – key trends
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?
Source: OPM and ICMM
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Understand the contribution
1. Costs + Risks
2. Benefits
3. Responsibilities
6
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
Exports
Mineral exports can rapidly rise to be a major
share of total exports in low income agrarian economies
even when starting from a low base.
Government Revenue
Mineral taxation has become
a very significant source of
total tax revenues in many such economies
with 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
Employment
60% - 90%
30% - 60%
3% - 20%
3% - 10%
1% - 2%
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Understanding the benefits (2)
Economic
Social
Cultural
Towards integrity, trust and
strengthened reputation
Environmental
Restoration ecology
7
From the dark side to
a positive agent of social change
10
For further information:
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@icmm_com