The next stage in responsible mineral development

Taking into account the predominant drivers of growth in the mining and metals sector and the challenges faced by the industry, the Forum’s Responsible Mineral Development Initiative (RMDI) has been working to gain a better understanding of the complexities involved in realizing the potential for responsible, sustainable mineral development. Launched in 2010, RMDI has been seeking to identify and pilot potential solutions to address these challenges. We found that adopting a broader understanding of “value”, to incorporate the social and environmental dimensions of mineral development as well as the economic, is key to building trust and avoiding conflict.

The RMDI has identified a number of possible actions, initiatives and case studies that address this set of challenges, based on extensive consultations with stakeholder representatives on six continents. These are not presented as universal solutions, but as practical examples that have helped to advance responsible mineral development in specific circumstances. They include, for example, the proposed adoption of collaborative processes for stakeholder engagement and dialogue. The RMDI is actively working to establish collaborative multistakeholder dialogue platforms in a number of countries where mineral development is or will be an important sector of the economy (e.g. Peru, Chile, Mongolia and Guinea). At either the national or local level, a dialogue platform can explore the perceptions and attitudes of participants regarding the value to be derived from mineral development activities, and can collaboratively assess the mining sector’s likely economic and social contributions and impacts and its interaction with existing government structures.

During the RMDI consultations, it was repeatedly emphasized that among all stakeholder groups involved in the mining sector, there often exists an insufficient understanding of the perceptions of other stakeholders regarding the potential value to be derived from mineral development, as well as a misalignment of expectations regarding the nature, scope and timing of both the benefits and costs of mining projects. To address this challenge, the RMDI focused on developing a tool for measuring and understanding the perspectives of various stakeholder groups on the value of mineral resource development, both positive and negative, and current and future. This tool, called the Mineral Value Management Tool, explores perceptions of value along seven dimensions:

• Fiscal and regulatory environments, including tax and royalty regimes and revenue management practices
• Employment and skill development
• Environmental and biodiversity impacts
• Socio-economic and cultural impacts
• Infrastructure development
• Beneficiation and downstream industries
• Procurement and local supply chain development

The tool tests perceptions about both positive and negative drivers of value in each of these dimensions, as well as direct and indirect or multiplier impacts. It will also consider a variety of structural and enabling factors that can enhance or restrict the creation of value in each dimension, including the inherent nature of a country’s mineral resource base; its current stage of economic development and the maturity of its minerals industry; the level of governmental capacity and institutional development; and the existing level of trust and collaboration among stakeholder groups.

The Forum unveiled the Mineral Value Management Tool during the World Economic Forum on Latin America in Lima, Peru, from 23 to 25 April, and is piloting the tool in Peru and other countries as part of multistakeholder dialogue processes during 2013. The intent is to make the tool available to any interested group of stakeholders engaged in or intending to start a dialogue process. The full RMDI phase III report is available here: Responsible Mineral Development Initiative 2013

Author: Britt Banks, Adjunct Professor, School of Law, University of Colorado, USA; Chair of the Global Agenda Council on Responsible Mineral Resources Management