Land Acquisition and Resettlement - Mining and the Environment: From Ore to Metal - page 598

risks are the main route to impoverishment, the central risk to which displaced people are
exposed. The following paragraphs expand on these risks based on Cernea (2000).

Landlessness

Land is the foundation on which our production system is based. It is a direct or indirect
source of our income. As such, land loss is a signii cant social impact, particularly in agricul-
tural societies which often host new mining ventures. Land loss not only occurs to provide
mine access; it is also the result of the inability of displaced people to i nd suitable new land.
This may be either due to a lack of suitable replacement land or the inability to buy such land,
since local prices may be inl ated or cash compensation may have been spent to meet immedi-
ate needs or, more likely was inadequate to effect full replacement. Clearly, to minimize the
risk of landlessness, resettlement plans should favour 'land for land' over cash compensation -
in situations where displaced communities are substantially reliant on land for their livelihood.

Land loss not only occurs to
provide mine access; it is also the
result of the inability of displaced
people to fi nd suitable new land.

Joblessness

Often underestimated is the loss of pre-displacement economic opportunities that are not
directly related to land ownership or that are caused by local economic cycles. Squatters,
wage labourers and vendors may lose employment and sources of income. Tribal
people may experience loss of traditional land rights and land use. Often overestimated are
the post-displacement employment opportunities. Previous skills of affected people may
become redundant, and previous markets become closed.
The creation of new jobs is difi cult. Like many other industries, mining is continu-
ally adopting less labour-intensive methods requiring a more highly skilled labour force.
Without implementing extensive occupational skills development programmes, it is difi -
cult to argue that mining brings many employment opportunities to unskilled local people.
On the contrary, with each new mine development, companies compete to maintain or

Often overestimated are the
post-displacement employment
opportunities.

CASE 14.2
Lihir Gold Project

Seeking to avoid the problems associated with
cash compensation, the operator of the Lihir Gold
Mine on the remote Lihir Island in Papua New
Guinea developed an innovative means of provid-
ing a long-term income stream to land holders.
The arrangement involved one or more land
holders receiving compensation in the form of
a piece of mining equipment, usually a haulage
truck, which is subsequently leased by the mining
company for use in operations at standard equip-
ment leasing rates. The owner may or may not
operate the equipment. The owner also receives

training in concepts of depreciation, savings and
investment with the objective that the owner
will be able to replace the equipment at the
end of its economic life. Clearly, the benefi ts of
this approach go well beyond the income stream
provided by the lease agreement; many successful
entrepreneurs have developed businesses from
similarly modest beginnings.

Photo: NASA Satellite Image of Lihir Island

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