Cooperation in strengthening mining governance capacity to achieve shared value and sustainable benefits

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1 Cooperation in strengthening mining governance capacity to achieve shared value and sustainable benefits EIP on Raw Materials Annual Conference January 2015

2 Minerals and energy development: unmet potential THE CHALLENGE 81 countries are driven by resources up from 58 in 1995 BUT 69% of people in extreme poverty are in resource-driven countries 80% of resource-driven countries have per capita income levels below the global average; more than ½ of these are not catching up 90% of resources investment has been in middle- and high - income countries Mining-related conflict is increasing Global resources revenues ~$3.5 trillion (est 2012) = 5% global GDP Sources: McKinsey Global Institute, Reverse the curse: Maximizing the potential of resource-driven economies, December 2013, and others 2

3 Minerals and energy development: unmet potential AND THE OPPORTUNITY TO REALISE SHARED VALUE AND SUSTAINABLE BENEFITS ~½ of the world s known mineral and oil and gas reserves are in developing countries investment needs to increase at >2X historic rates to meet long term demand $11-$17 trillion of resources investment could be needed by 2030 more than double the historical investment rate 540 million people in resource-driven countries could be lifted out of poverty, triggering economic and social transformation Opportunities to share $2 trillion of investment in resource infrastructure 50%+ improvement in resource-sector competitiveness possible through cooperative action Source: McKinsey Global Institute, Reverse the curse: Maximizing the potential of resource-driven economies, December

4 The developing world hosts strong exploration activity TOP DESTINATIONS FOR NON-FERROUS EXPLORATION 2013 Latin America 26% Africa 14% Source: SNL Metals and Mining World Exploration Trends

5 How to turn potential shared value to actual? FOR HOST COUNTRIES, COMMUNITIES AND INVESTORS AND CUSTOMERS Value of discoveries by Australian (ASX) companies $2,100bn Value of discoveries by other companies?$4,000bn?$5,000bn Maiden resources discovered and delineated by ASX companies

6 Resource-driven countries need a new growth model TO TRANSFORM THEIR POTENTIAL RESOURCE WINDFALL INTO LONG-TERM PROSPERITY Building institutions and governance of the resources sector Developing infrastructure Ensuring robust fiscal policy and competitiveness Supporting local content Spending resources windfall wisely Transforming resource wealth into broad, inclusive socioeconomic development Gaining community support for responsible resource development Skills and institutional capacity are key to sound governance. OECD: "Skills have become the global currency of the 21st century. Without proper investment in skills, people languish on the margins of society" Source: Adapted from McKinsey Global Institute, Reverse the curse: Maximizing the potential of resource-driven economies, December 2013 and IM4DC 6

7 Resources companies need a new approach to the changing landscape PARTNERSHIPS WITH GOVERNMENTS & COMMUNITIES IN ECONOMIC & SOCIAL DEVELOPMENT TO BUILD SHARED VALUE Source: McKinsey Global Institute, Reverse the curse: Maximizing the potential of resource-driven economies, December

8 International Mining for Development Centre Role of IM4DC UNIVERSITY PARTNERSHIP SUPPORTED BY AUSTRALIAN GOVERNMENT Mission Support developing countries to transform their extractive resource endowment into inclusive and sustainable economic growth and social development Goal IM4DC alumni and partner institutions effect change through transformational leadership in mining, development and related activities Themes Governance and Regulation Community and Environmental Sustainability Operational Effectiveness Agent for sustainable mining underpinned by good governance 8

9 International Mining for Development Centre IM4DC mining governance capacity-building INTEGRATED, UNIVERSITY-BASED PROGRAM Education and training Action research Fellowships Institutional linkages Publications Alumni network and conferences Advice to governments 9

10 1 0 International Mining for Development Centre IM4DC mining governance capacity-building INTEGRATED, UNIVERSITY-BASED PROGRAM Education and training Action research Fellowships Institutional linkages Publications Alumni network and conferences Advice to governments

11 Partnerships with other institutions UNDERPIN IM4DC CAPACITY-BUILDING Institutional partnerships in developed and developing countries Universities Government agencies NGOs Multilateral organisations Donors Industry associations Companies 11

12 Mining lifecycle and key interactions FIELDS IN WHICH IM4DC BUILDS GOVERNANCE CAPACITY Community engagement Indigenous agreement-making Resource governance Negotiations and agreements Occupational health & safety Precompetitive geodata Regional development Post mining economy Acquisition and exploration Construction and development Mining and concentration Transport Trading, marketing and sales Closure, rehabilitation and monitoring Environmental & water management Mineral economics & policy Mine closure and post mining land use Local content & enterprise Education, training and skills Revenue design & administration Infrastructure planning & delivery Mine waste management 12

13 Where IM4DC is working 226 Mongolia West Africa Myanmar Cambodia 651 SE Asia & Pacific 5b Ghana Africa 1071 Zambia East Africa Tanzania Mozambique Southern Africa Indonesia The Philippines Papua New Guinea Solomon Islands Fiji Colombia Peru Bolivia Ecuador Latin America 366 Uruguay African countries serviced by IM4DC include: Congo, Mali, Morocco, Niger, Nigeria, Burkina Faso, Ethiopia, Guinea, Cote d Ivoire, Gabon, Uganda, South Africa, Kenya, Malawi, Cameroon, Tanzania, Sierra Leone, Senegal, Namibia, Madagascar, Cameroon, Ghana, South Sudan, Zimbabwe Multi year engagement with governments and institutions Participation in courses, study tours, research Number of IM4DC education and training participants

14 IM4DC delivery IM4DC Achievements GLOBAL CAPACITY-BUILDING SUCCESSFUL OUTPUTS TRAINING OUTCOMES Resulting in significant changes 2314 participants from 65 developing countries participant training days short courses October 2011 to February % female in mining & development action participation alumni network research

15 Shared interests and goals between stakeholders BASIS FOR COLLABORATION IN MINING GOVERNANCE CAPACITY BUILDING Developing supplier countries Mining and METS* companies Customer & investor countries Developed supplier & investor countries Capacitybuilding organisations Communities & NGOs *METS = Mining Equipment, Technology and Services 15

16 Building a shared value, sustainability and preferred partner framework ASSURING LONG TERM RESOURCE SUPPLY SECURITY Responsible supplier countries, customer countries and companies have shared goals as should communities Need to build broad-based value proposition to be preferred partners with developing countries As partners in governance and education capacity-building As reliable customers As responsible investors As catalysts for inclusive economic and social development A key is social licence to operate from communities 16

17 Activating EIP International Cooperation Pillar EUROPE AND AUSTRALIA HAVE COMPLIMENTARY CAPABILITY AND INTERESTS Focus on developing country capacitybuilding Action area 1: Technology Action area 2: Global Raw Materials Governance and Dialogues Action area 3: Health, Safety and Environment Action area 4: Skills, Education and Knowledge Action area 5: Investment Activities Support the other EIP pillars on both technology and non-technology issues 17

18 Conclusion OPPORTUNITIES TO COOPERATE TO ACHIEVE SHARED VALUE AND SUSTAINABLE BENEFITS FROM MINING The world needs mineral and energy resources Resource-rich developing countries are seeking new growth models Customer and investor countries have an imperative to support sound mining governance and sustainable growth Mining and services companies are embracing shared value and sustainability approaches NGOs, universities and training centres can support capacitybuilding through knowledge transfer and institutional partnerships 18

19 Some IM4DC Alumni Ibrahim Hardjawidjaksana Indonesia Abena Asante-Asare Ghana Peter Bangura Sierra Leone Oyuntsetseg Oidov Mongolia 19

20 Contact International Mining for Development Centre The University of Western Australia WA Trustees Building Level 2, 133 St Georges Terrace Perth WA Australia 6000 Tel: admin@im4dc.org The Energy and Minerals Institute The University of Western Australia M475, 35 Stirling Highway Crawley WA Australia 6009 Tel: emi@uwa.edu.au The Sustainable Minerals Institute The University of Queensland St Lucia Brisbane QLD Australia 4072 Tel: reception@smi.uq.edu.au