Looking Ahead - Mining and the Environment: From Ore to Metal - page 848

Environmental Assessment and the Sustainability of
Mining at a Micro-economic Level

Mines come in all forms and sizes, but modern mining operations may be of such a scale
that the associated capital expenditure can make a measurable impact on the economy
of the host country. Because of the relatively small size of the economies of most devel-
oping countries, the economic impacts of mining tend to be relatively large, particularly
in the region that hosts the mine. The challenge for a mineral-rich developing region is
the appropriate use of the revenues arising from resource development. Part of this rev-
enue needs to be put aside to replace the capital being used up and, indeed, add to it
(Humphreys 2000). Natural capital, that is, the valuable minerals, needs to be converted
into other forms: built capital, or social capital. As economists understood long before the
contemporary notion of sustainability, what counts in the creation of wealth is not the par-
ticular form of available capital, but the net stock of capital in all its forms. Sustainability is
about maintaining and augmenting that stock.
More recently, the focus of debate over mining's sustainability has shifted from the
macro-economic to the micro-economic level. Specii cally, it has moved to address the issue
of the longer term impacts of individual mining operations on the local and regional econo-
mies in which they are located. There is no guarantee that the host communities of a mine
will necessarily be benei ciaries, even during project operation. Companies have increas-
ingly come to recognize that returning benei ts to the host region is not a matter which can
be left to government authorities alone. Many companies have determined that they need to
take an active part in ensuring that the regions in which they are operating receive a reason-
able share of the economic benei ts from those operations. Moreover, they realize the need
to prepare the basis for sustainable economic activities after they have gone. While this is
difi cult, it can be done. The slow-moving nature of the mining industry means that there
is often, at least in principle, enough time to work out how mining can leave lasting eco-
nomic benei ts where management has specii cally set out to create them. The environmen-
tal impact assessment process is the appropriate vehicle to commence such planning. It is
fair to say, however, that current EIA practice does not always provide enough understand-
ing of the host region's micro-economy to provide a sound platform for necessary planning
and subsequent implementation. There is a need in the environmental assessment process
to add to the traditional focus on the physical-chemical and, more recently, from the socio-
cultural, to include a balanced analysis of the economic impacts of a new mine development
( Figure 22.4 ) . These impacts certainly include economic risks, but should also identify the
opportunities that would ultimately help to justify permission for a new mine to proceed.

The challenge for a mineral-
rich developing region is
the appropriate use of the
revenues arising from resource
development.

The slow-moving nature of
the mining industry means
that there is often, at least in
principle, enough time to work
out how mining can leave
lasting economic benefi ts where
management has specifi cally set
out to create them.

Mining as Part of Integrated Regional Development Planning

It is better to address the need to optimize a mine's potential for integrating with regional
economic development at the outset of a new project rather than part way through. A care-
fully prepared EIA that addresses all economic dimensions of the project will go a long
way to optimizing regional development, while mitigating costs to the affected communi-
ties. However, as a result of the tendency of governments, supported by public opinion,
to shift more non-operational responsibilities onto the mine operator, good intentions and
good ideas may turn into major cost commitments. The host government retains primary
responsibility for identifying, coordinating and i nancing regional development, particu-
larly in view of the often vast government revenues generated by the project. This, however,
is an ideal not always encountered in the real world.