socially responsible mining: building kenya...
TRANSCRIPT
Socially Responsible Mining: Building Kenya Capability
Presentation to Multi-Stakeholder Secretariat for Extractives
Ian Satchwell
20 September 2013
International Mining for Development Centre
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Mining for Development Initiative
IM4DC A KEY ELEMENT
–
M I N I N G F O R D E V E LO P M E N T
IM4DC Country/region programs
Extractive Industries
Transparency Initiative (EITI)
Government to government partnerships
Community and social
development
Advanced degree
scholarships
Build skills and capability within government, universities, research institutions and civil society organisations to bring about:
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IM4DC
OBJECTIVES
Improved policies, practices and legislation
Improved knowledge of
resources base
An ability to continue to
build local capacity in mining governance
How? Short courses, workshops, conferences, study tours, research, fellowships, institutional partnerships
● Geodata ● Minerals and energy policy ● Resource governance ● Licensing and agreements ● Indigenous agreement-making ● Community engagement ● Local content ● Regional development ● Infrastructure planning and delivery ● Revenue design ● Mine waste management ● Mine closure and post mining land use ● Environmental and water management ● Occupational health and safety
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Leveraging Australia’s Mining Expertise IM4DC COURSES AND ACTIVITIES
Activities cover the mining life cycle and all elements of mining for development
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FOUR PRIORITY COUNTRY HUBS; ~16 OTHER COUNTRIES
International Mining for Development Centre
Africa program 2013-14
• 17 courses in Africa • Access to 18 courses in
Australia • Fellowships • Action Research • Institutional partnerships • Advice to governments • M4D Conference • Alumni community of practice
Where IM4DC is working
International Mining for Development Centre
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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
Multi year engagement with governments and institutions
Indonesia
Mozambique
Ghana
Afghanistan
Mongolia
Peru Zambia
Liberia The Philippines
Locations of peer partner institutions
Chile
Canada
South Africa
USA
United Kingdom
Australia
Participation in courses, research
West Africa Laos
Colombia
Uruguay
Ecuador
Southern Africa
East Africa Bolivia
Possible future priority engagement
Myanmar
Pacific
IM4DC Achievements SUCCESSFUL CAPACITY-BUILDING
• “Grow the pie” strategies
• Economic reform and infrastructure partnerships
• Investment attraction, efficient approvals, certain fiscal regime
• Win-win-win approaches: partnerships, delivery of returns for all
• Using mining to facilitate broad-based economic growth
• Importance of technology, knowledge and skills
• Generating strong social licence to operate
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Some context: Australian approaches
Source: Qantas
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What is socially responsible mining?
Corporate social responsibility ‘plus’
(standard CSR is now part of core business) +
Good governance (government, industry & community)
+ Sustainable, broad-based returns
(government, community, companies)
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Australia is well located to supply Asia with mineral and energy products
Bowen Basin region coal, LNG
Hunter region coal
Iron ore, LNG
The ‘new normal’ minerals market is still okay, but competitiveness key…
How to activate the potential?
Australia’s engineering and construction challenge – the largest investment wave since the 1800s gold rushes*
HOBART
Western Australia
Northern Territory
South Australia
Queensland
New South Wales
Victoria
SYDNEY
CANBERRA
MELBOURNE
BRISBANE
ADELAIDE
DARWIN
BROOME
PERTH
Offshore petroleum basins
WA & NT projects to 2016: USD220 billion+
Queensland projects to 2016: USD100 billion+
South West Region Alumina, mineral sands, gold
Mid West Region Iron ore, gold, uranium, nickel,
Pilbara Region LNG, iron ore, infrastructure
LNG, mining
Bowen, Surat and Galilee Basins Coal, CSG, LNG
South Australia projects to 2016 USD10 billion+
11 *Reserve Bank, Australia
Copper, uranium, mineral sands, petroleum
PORT HEDLAND KARRATHA
Gladstone and North West Economic Triangle Base metals, bauxite-alumina
Goldfields Region Gold, nickel, iron ore
NSW Coal, gold, base metals
Western Australia case: investment will result in decades of increased production with lower volatility
* At ten year average prices
Historic and forecast production value* for WA’s key resources
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2005 2009 2013 2017
Gold
Iron Ore
Nickel
Oil/Gas
Alumina and Bauxite
Double 2011 value $m
Source: ACIL Tasman analysis 12
Increased sustaining capital and
services
Resource economy in Australia: bigger than traditionally measured
Resource employment by industry 2011-12 Share of total employment, financial year
Source: Rayner and Bishop, Reserve Bank of Australia February 2013 13
Gross Value Added – resource economy 2011-12 Share of nominal GVA, financial year (has more than doubled in past 10 years)
Resource economy accounts for 18% of GVA • 11.5% directly from extraction and processing • 6.5% from other sectors providing inputs
Resource economy accounts for 10% of employment • 3.25% directly from extraction and processing • 6.75% from other sectors providing inputs
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Indirect Induced
Direct from mining Local
manufacturer or service provider
Purchasing expenditure for local goods and services
Payments to employees
Subsequent backward expenditure for local goods and services along the supply chain
Income of supply chain employees
Taxes paid by suppliers to the Government
Household consumption as direct and indirect employees spend their income within the local economy
Taking a broad view: indirect and induced benefits from mining
Economic output
Local dealer
Income of dealer’s employees Taxes paid by dealer to the
Government
Household consumption as direct and indirect employees spend their income within the local economy
Adapted from Saipem 2011
In Australia, for every $1 of mining revenue, 40¢ is spent on goods and services: Reserve Bank
Trade & foreign investment
3
Service and technology hub
2
It’s not only about mining: other growth drivers
Global & regional HQ 1
Agriculture and food sector growth
4
15
Source: Grattan Institute 16
Growing mining is important, but so is growing other sectors
Australian exports 1998 – 2012 Investment in Australia 1960 – 2010
Growth in real value-added by sector, 2000-2012 (%)
Western Australia case: Employment growth – more than just mining jobs
Source: CCIWA: Building Western Australia’s Workforce for Tomorrow, June 2010
0 50,000 100,000 150,000 200,000 250,000 300,000
Other
Administration and Support
Hospitality
Transport
Manufacturing
Education
Professional Services
Mining
Retail
Healthcare and Social Services
Construction
0 500,000 1,000,000 1,500,000
Non Mining and Construction
Mining and Construction
Current workforce (2010) Additional workers until 2020
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Australian mining employment multiplier is 3 – 4
Major focus on education and training for employment across the economy
Employment growth by industry sector 2010-2020
Strong pre-competitive geoscience underpinnings
The role of pre-competitive geodata
REGIONAL GEOLOGICAL
MAPPING
MINERAL RESOURCES
ASSESSMENT
REGIONAL EXPLORATION
10
100
1,000,000
>10,000,000
100,000
USD/km2
DETAILED EXPLORATION
MINE DEVELOPMENT
PUBLIC FUNDING
PRIVATE FUNDING
• Help as incentive for exploration investments • Provides decision tool for government • Cost is a function of the quality and type of data • Long run pay-offs deter some governments
Source: World Bank
• WAXI GIS: available to all partners for 18 months then open
• Online and disk-based access as MapInfo & ArcGIS layers
• Coverage at three scales: o West Africa o Africa o Global
• 5 Themes: o Geography o Geology o Geophysics o Mineralisation o Tectonics
• 250 GB of Data and Meta-data • 128 Data layers • 12 Meta-data Layers
West Africa Exploration Initiative – all-stakeholder collaboration
AusAID funds training
elements
IM4DC OpenData: open access geodata for Western Central Africa
• IM4DC explorer
• GIS web application
• Countries included: Benin, Nigeria, Chad, CAR, Cameroon, Equatorial Guinea, Gabon, Congo, DRC
• Focus on the Congo Craton and surrounding mobile zones
• www.opendata.im4dc.org
• 011-12
Australian exploration projects – strong base of grassroots, but few make it to feasibility (high risk, high reward) – implications for investment attraction
1352
1126
626
203
680
649
172103
12262
11666 834
3798227
4940247
341
296
10059
0
500
1000
1500
2000
2500
3000
3500
Au Cu Coal U REE Ni
Feasibility
Advanced
Exploration
Grassroots
Number of exploration projects by stage of development Source: Geoscience Australia, 2011-12
Growth of Mining Equipment, Technology and Services (METS) – additional way of thinking about value-adding
METS output is growing at 15 to 20% a year • 4% of national output in
2002-03 • 8.4% in 2011-12 METS contribution to GDP • 6.7% in 2010-11 • Est. 9.4% in 2012-13 Many METS are knowledge- and technology-intensive
Source: Australian Treasury and Ed Shan / Minerals Council of Australia 23
Source: Austmine 24
METS is now a very important industry sector
…with deep links into the economy
25 Source: Austmine
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METS firms are exporting, equipment, technology and knowledge – developed from 150 years of mining knowledge
Source: Austmine
• Proponents involved in Australian projects encouraged to adopt Australian Industry Participation Plans (AIPPs)
• Most mining and petroleum projects have AIPPs ● Cover construction and operation ● Take in national, regional and local content ● Include Indigenous content ● Encompass skills, materials
and services inputs ● Link-up purchasers and suppliers
via Industry Capability Networks
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Optimising local content – Australian Industry Participation
Source: BREE and LME 28
Challenge 1: Market volatility and uncertainty, as always!
Annual zinc prices and stocks
Annual nickel prices and stocks
Annual copper prices and stocks Annual aluminium prices and stocks
China growth rates and patterns of growth? Demand from rest of Asia?
Challenge 2: Margins and returns are not as strong as previously
Source: Resource Nationalism: How to grow, not shrink the pie, Nick Holland, Gold Fields, September 2013
Note: Cost per tonne is the weighted average of 8 major gold producers by total ore mined; average grade is the weighted average of 8 major gold producers by total ore mined; Major Gold producers: AngloGold Ashanti, Barrick, Harmony, Kinross, Goldcorp, Gold Fields, Newmont and Newcrest. Source: Gold Fields company data; annual reports, Condemned to Excellence report(IAMGOLD Corporation, Dec 2012)
…so mining not as attractive to investors; increased competition for mining investment
Source: Resource Nationalism: How to grow, not shrink the pie, Nick Holland, Gold Fields, September 2013
Source: AME; Brook Hunt 31
Challenge 3: competitiveness of Australian mines – cash operating costs: percent of production by cost curve quartile
Challenge 3: Infrastructure provision Infrastructure Australia approach
Priorities • Identifying, prioritising and
investing in infrastructure that delivers real economic, social and environmental benefits
• Creating new opportunities to fund and finance infrastructure though PPPs
But arguably insufficient emphasis on knowledge infrastructure
People are Australia’s most important asset Focus on attracting, developing and retaining high-quality talent, not just a focus on hard infrastructure
Education and training institutions: key
infrastructure assets
Complementary to traditional
infrastructure
Public sector and industry collaboration
• Crucial to dealing with challenges and opportunities of the 21st Century • Advanced education integrated with research
• Knowledge-intensive and knowledge creating • Adaptable and capable to deal with uncertainty and to engage with the
emerging new global economy
• e.g. Technical colleges; SKM Learning Centre, GE Energy Learning Centre; University research and teaching centres (Rio Tinto, BHP, Chevron, Shell)
• Knowledge spillovers: trained workers move between projects and firms, taking skill set and culture with them
Integrated policy on industry, education and training
It’s for the people: building strong community benefits, understanding and support
Contact International Mining for Development Centre WA Trustees Building Level 2, 133 St Georges Terrace Perth WA 6000 Australia Tel: +61 8 9263 9811 Email: [email protected]
www.im4dc.org
The Energy and Minerals Institute The University of Western Australia M475, 35 Stirling Highway Crawley WA 6009 Australia Tel: +61 8 6488 4608 Email: [email protected] Web: www.emi.uwa.edu.au
The Sustainable Minerals Institute The University of Queensland St Lucia Brisbane QLD 4072 Australia Tel: +61 7 3346 4003 Email: [email protected] Web: www.smi.uq.edu.au
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