Drivers of a country’s Law and Policy framework


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Drivers of a country’s Law and Policy framework

    • Drivers of a country’s Law and Policy framework
    • Mineral ownership and legal rights
  • Strategy for Sustainable Development

    • Appropriate Law and Policy with ‘optimal mining’ at concession level


  • Common sense matters, e.g. respect

  • Nature of Mining

  • Economic landscape

  • Political economy

  • Sustainable development



  • What is mining?

  • Reserves and resources

    • Resource base - What matters are concentration factors
    • Reserves - McKelvy's Box
  • Ownership and investment

    • Need for risk capital – Typical risks
    • Private/State Participation schemes
  • Participants

    • Small-scale companies
    • Junior companies
    • Multinational companies
    • Non-mining companies








  • Brundtland definition

    • It does not mean that the minerals should be kept in the ground for future generations
    • It means that the wealth-creating potential must be maximized
  • Generally accepted as having three dimensions

  • Difficult concept for mining because individual ore deposits are not sustainable

  • Depends on the economics of the project

    • Undiscovered ore deposits are valueless.
    • Value added is the basic measure of the effectiveness of mining and of its contribution to welfare
















Legal system of ownership

  • Legal system of ownership

    • Level of ownership and Participation in ownership
    • Land and Mineral ownership
    • If mining has precedence over other land uses or not
  • Security of tenure

    • Terms and conditions
    • Land and mineral rights registry
  • Obligations

    • Health and Safety Requirements
    • Environmental and Social requirements
    • Reporting and monitoring requirements
  • Administration of rights

    • Responsible State Agency
    • Special incentives for investing in remote areas
    • Reconnaissance, Prospecting, Retention and Mining rights and permissions:
    • Mineral block auctioning


  • Responsible State Agency

  • Special incentives for investing in remote areas

  • Reconnaissance, Prospecting, Retention and Mining rights and permissions

  • Mineral block auctioning

  • Plans, budgets and programmes are essential to demonstrate commitment!



Needs of producing/exporting countries

  • Needs of producing/exporting countries

    • Instruments to stimulate mineral development
    • Instruments to maximise the net economic benefit of mining
    • Other instruments affecting the mining industry
  • Law and policy instruments used by importers to ensure availability of minerals that affect the mining industry

    • Support R&D to promote substitution and Recycling
    • Own/control production through Bilateral or multilateral agreements
    • Trade , Tariff and Competition policies
    • Restrictions on the usage of materials, or on end-use products
  • Realistic trade-offs between conflicting objectives

    • There are conflicting stakeholders with different agendas
    • Host country versus Mining Company
    • Present versus Future generations
    • External versus internal costs (Environment/Societal costs)


"...there is no such a thing as 'standard approach'...Policy options and recommendations must be country specific and must be adapted to the local economic, social and cultural environment" GTD, 2008

  • "...there is no such a thing as 'standard approach'...Policy options and recommendations must be country specific and must be adapted to the local economic, social and cultural environment" GTD, 2008

  • To ensure sustainable economic development policy makers must design appropriate policy supported by law, i.e. appropriate Mining Law and Policy

    • Address governance problems and capacity constraints first, which is critical for avoiding the resource curse
    • Aim for sustainable growth and economic development
    • Aim for optimal development of mineral resources




Mineral revenue management provides finance for development

  • Mineral revenue management provides finance for development

    • Review fiscal policy for mining sector
    • Invest and reinvest proceeds for the future
    • Use resource revenues wisely (Consider stabilization funds)
  • Implement SD as a national ideology

  • Link mineral development with economic policy

  • Promote linkages between mining and other economic sectors

    • Resource-based industrialization strategy (RISD)


  • Establish Mineral Policy and Law Frameworks for optimal development

    • Introduce equitable investment regime (See next slide)
    • Development and implementation of Mineral Laws and Model Agreements
    • Compile statistics/Information to understand and market the minerals sector
  • Efficient and clear system of rights and property titles

    • Implement clear licensing/production sharing/auctioning/COW regime
    • Provide for measurement/reporting tools
    • Regulate and monitor the sector
  • Manage local impact of mining

    • Agreements must enforce optimal mining
    • Enforce duties of the mining industry
    • Develop mine rehabilitation and closure provisions
  • Agenda 21 Instruments should be adapted for local conditions

    • Developing mineral policies to address country issues
    • Integrate environment and development issues in decision-making
    • Ensure public access to relevant information and Enforce compliance with the Law and Policy framework


  • Development of mineral policies according to sustainable development principles and unique country issues

  • Reserve mineral ownership in public (Define level of state ownership)

    • Prevent mineral resources in the ground from becoming dormant assets
    • Stimulate/promote mineral development (Use-it-or-lose-it!)
    • Provide for compensation in the event of expropriation
  • Set corporate structure requirements

    • Level of foreign ownership
    • Level of national employment
  • Link concessions/agreements/licenses to national objectives







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