Community Development - Mining and the Environment: From Ore to Metal - page 642

Economic Stimulation

There is little dispute that the mining industry relies on a range of goods: chemical and
petroleum products, timber, iron and steel products, fresh produce, and general industrial
and domestic products. Equally, each mining operation awards contracts for a wide range
of services: maintenance of machines and equipment, explosives, security, accommoda-
tion, catering, engineering and consulting, administration and accounting, transportation
and construction are some examples. Mining does stimulate the local economy through its
demand for goods and services. Some critics argue, however, that its contribution could
and should be larger. Critics often don't recognize, however, that many of the goods that a
mine requires are highly specialized and are not readily available in the host country. It is
also often argued that while developing countries do provide raw materials, value-added
and labour intensive downstream activities remain the domain of metal consumer coun-
tries. The proper response to such critics is with the host government and in the form of
appropriate investment policies, not with the mining industry. It is also clear that, as the
industry grows in any particular country, local services and supplies will also grow.

Improvement of Social Services

Mining projects are often located in remote areas, far from basic services and markets. Either
by law or by necessity, mining companies are required to provide a range of services for their
employees, including providing clean water, education or health care, all of which also benei t
neighbouring communities. Mining projects also engage in community development. With-
out proper planning these benei ts to local communities will cease when the project ends.
It is not surprising that the main limiting factor for CD programmes is i nancial capac-
ity. Sustainability requires signii cant community contributions (both cash and in-kind)
towards initial capital outlays and, eventually, full recovery of operational and mainte-
nance costs. The extent of community contribution is in fact a key measure of sustainabil-
ity. Typically, the community is too poor to make large cash contributions. By the same
token the local government often has virtually no tax revenue base and is dependent on
unreliable and inadequate transfers from the central government. Other times, communi-
ties and local government authorities do not have the requisite technical expertise or the
i nancial resources to make, say, infrastructure repairs. On yet other occasions, low degrees
of social mobilization (free-rider incentives) can lead to declines in volunteer labour
pledged to maintain a CD programme. As a result, without continuous funding by the
mining project, CD programmes such as infrastructure support deteriorate and become of
limited or no use after a few years.

Mining projects are often located
in remote areas, far from basic
services and markets.

Without continuous funding by the
mining project, CD programmes
such as infrastructure support
deteriorate and become of limited
or no use after a few years.

15.7 COMMON PROBLEMS AND SOLUTIONS

At least in theory, the prospects for creating sustainable, effective community development
programmes can be straightforward. An integrated partnership between the company and
the community's formal and informal leaders is necessary to create programmes that work
and are sustainable. Intelligent planning is essential for successful community development,
and it must be approached as an integral part of planning every stage of the mining project.
And yet, more often than not, CD projects go wrong. Here are some of the reasons.
Most problems relate to ignoring the previously stated 'pointers to success' by doing the
opposite ( Table 15.9 ) . However, other things can go wrong (Frank and Smith 1999).