Drivers of a country’s Law and Policy framework

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

• Contribute to the (national) economic system
• Establish distinctive development policy objectives from the national strategy

• 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

• Sustain the benefits of mining after resource depletion
• Reduce the cost of mining to society
• CSR requirements