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sharing in governance of extractive industries

Is the mining industry vital to the creation of wealth and prosperity?

In the introduction to its 2010 ranking of countries for mining investment, Behre Dolbear Group states: 

 

"The mining industry is vital to the creation of wealth and prosperity in any country and that countries that stifle it with detrimental political, economic and financial policies should be challenged to make changes more accommodative to its success."

 

Do you share this view?

 

 

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Yes, this will largeley depend on whether governments and investors realize social and econcomic linkages of  mining concessions. For instance in Africa, after an extensive consultation, the African Union (AU) Summit adopted the Africa Mining Vision (AMV) in 2009 to assist member states in developing resource regimes conducive to the maximisation of the developmental impacts of their resource endowments. Are those linkages established in the national policy, the law and the concession agreement - and thereafter implemented and monitored? However in 2011, only a few African countries are systematically following their AU-approach. The principal resource endowment opportunities enumerated by the AMV are:

1) Up-stream linkages into mining capital goods, consumables & services industries;

2) Down-stream linkages into mineral beneficiation and manufacturing;

3) Side-stream linkages into infrastructure (power, logistics; communications, water) and skills & technology development (HRD and R&D).

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Lutz, as you suggest, like many good vision documents, the AMV is gathering dust. Do you have any insight into the countries that are making the best efforts at implementing it? 

 

Kobina and Lutz,

 

the AMV makes interesting reading and leads the way for an informed and proper debate not just one lead by NGO's. I had never seen it before and am fascinated by it. good stuff.

I concur, but from an African perspective, until the political question is resolved in most of the Sub-Saharan countries, it still remains a "quick sand " for all speculative investors to risk their resources.

 

 

Don when will this question be solved? if the political question in a 3000 year Greece or a 200 year America is still unresolved for how long should Africans wait before investment? is it not true that proper growth (sometimes lead by natural resources) can settle the politcal questions?

@Elison: Alas, the chicken and the egg! 

I don't claim to speak for Don, but if I may offer a thought of my own...

...I take your point that there appears to ample evidence around the world that, given a choice, most citizens will choose economic growth over democracy. The problem we face, in my view, in too many resource-rich countries is that the growth is not broad-based and sustainable enough to create the cushion to solve the political question. Therefore, many citizens end up with the worst of both worlds. Of course, it doesn't have to be so, and there is evidence on the other side as well. I guess that's why we're here to share lessons, isn't it? Cheers. 

excellent choice of words Kobina.."the chicken and egg problem." fundamentally it must be a question of governance. Lee Kuan Yew did not deliver democracy. Neither did Deng Xiao Peng. But they brought growth.  but 2 b fair I believe in democractic governance. what I dont agree with is that investors should not risk their money in Africa. today Africa offers a great opportunity for a handsome return on investment. the policy questions about how  citizens benefit must begin from the position that there is something to benefit from. we cant fail to exploit resources because we are not sure that growth will be evenly distributed. lets ensure growth and distribution. but we cant wait for political consensus or democractic perfection. because before we get the egg the chicken would have crossed the road and gone to the other side
Even better use of the analogy, Elison :)

@ Kobina, Uganda has one of the most educated leadership south of the Sahara, the failure by government to put in place a proper policy and legal framework is a complete manifestation and testamentary of today's corrupt leadership in Africa. While the government is losing millions of dollars in secret deals, those within the inner circle of the centre of power continue swim in questionable wealth. You can say the government is losing if you mean the people, but in the eyes of our leaders who the sole beneficiaries of these resources, this is good business for 'the government'! What we lack in Africa is servant leadership. Forget all the good policies we are advocating for here because you need a people centered leadership and political landscape to implement such policies.

 

Don very interesting argument! i have no authority to speak for govt but i must respectfully differ with you.  there is a policy. there is a law. there is also a bill. there is a proposal for a 2nd bill. there is a debate about the current bill. there are also PSA's governing the relationship between govt and oil companies. further licensing of blocks is on hold pending the new laws. i also dont agree that we should stop having policy debates. the biggest challenge I have found amongst the political actors in many countries is the failure to have a policy debate about anything. so take Uganda..do the politicians ever speak about the extractive industries? (politicians from all sides) did alternative ideas appear in the campiagns or did all candidates just address populist concerns in the local area? so we must start to shine a light by looking at what is on the table and seeing what better alternatives are available. if any. I also dont agree with the dismissal of the public officers who negotiate the contracts... i think they try..and in Uganda's case I dont think they have done a bad job but maybe we can help them do a better one

a policy.  here http://wildugandablog.com/wp-content/uploads/2010/06/national-oil-a... an act here http://ugandapetroleum.com/linked/laws_of_uganda-petroleum_explorat... regulations here http://ugandapetroleum.com/linked/petroleum%20exploration%20and%20p... 

Who are these Behre Dolbear Group?

What authority do they have to challenge any country's national resource development policies, no matter how we despise that country and its leadership?

And whom are they calling on to challenge the said countries' policies?

 

Natural resources development goals are the rights of any country, be it some banana republic. It is not like some human rights abuse issues by a government that it becomes a moral obligation for the rest of the civilized world to do all it can to stop.

I know of a (West African) country where the leadership ( albeit dictatorial) decided to postpone the exploitation of a large precious mineral deposit until the country acquired significant human resource capacity to do so. At that time, imagine the condemnation by hungry investors who could not wait to get their hands on the wealth of that country. The bloke has been dead a long time but his countrymen now pray for him to rest in peace for his foresight for his country.

Eng. Ahmed Finoh

in todays world unfortunatley these kind of groups have a large say. Moodys, S & P and Fitchs downgrade of Greece,  Portugal, Ireland have caused soveriegn debt crises in the world... actuallyu what Toure (was it him?) did was recently emulated in Uganda..the Ugandans passed the law and began prospecting in the 1980s but the president stopped it and sent people abroad to study and they formed the nucleus of the Petroleum Exploration Department..but i think that as it stands now Behre have a point. it no longer makes sense to simply sit on wealth because u fear "curses"....

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