tag:theconversation.com,2011:/africa/topics/copper-mining-17832/articlescopper mining – The Conversation2023-10-26T01:54:33Ztag:theconversation.com,2011:article/2163462023-10-26T01:54:33Z2023-10-26T01:54:33ZAll mines close. How can mining towns like Mount Isa best manage the ups and downs?<p>The <a href="https://www.glencore.com.au/media-and-insights/news/mount-isa-mines-operational-changes">announcement</a> by Glencore last week that its Mount Isa copper mines will close in 2025 is <a href="https://www.abc.net.au/news/2023-10-18/mount-isa-residents-react-to-glencore-copper-mine-closure/102990846">significant for the town</a>. </p>
<p>The closures affect <a href="https://www.abc.net.au/news/2023-10-19/glencore-copper-mine-mount-isa-closes/102994426">at least 1,200 jobs</a> in the Queensland outback community of 21,000 people. Those affected include mine workers, contractors, suppliers and businesses.</p>
<p>Questions raised by the closures have wider relevance for how other towns and regions across Australia manage mines as they come and go.</p>
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<a href="https://theconversation.com/cleaning-up-australias-80-000-disused-mines-is-a-huge-job-but-the-payoffs-can-outweigh-the-costs-215447">Cleaning up Australia's 80,000 disused mines is a huge job – but the payoffs can outweigh the costs</a>
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<h2>Plan the end from the beginning</h2>
<p>All mines close. However, the impact of future closures on communities is rarely front of mind when mines open. This means the issue of how towns effectively manage a mine’s closure can be treated as an afterthought. </p>
<p>One important way to ensure towns and regions can manage mining and its impacts is for community perspectives to inform public policymaking and planning. The period before a mine opens is the ideal time to openly discuss how its life – and its end of life – will play out for the community. This includes any <a href="https://www.kalkadoonpbc.com.au/">Indigenous people</a> on whose land mining is to take place.</p>
<p>Swiss multinational Glencore now owns Mount Isa Mines, which has been in international hands almost since inception. </p>
<p>The early owners brought international ideas of industrial relations and town planning to the region. This encompassed a financial guarantee to deliver a railway to the town and strategic planning of infrastructure to attract the <a href="https://researchonline.jcu.edu.au/39437/1/39437-kirkman-2011-thesis.pdf">right type of miner</a> – a family man who was more likely to establish roots in the town.</p>
<p>Townspeople’s voices were not heard in this early planning. While the original owners wished to create a “<a href="https://researchonline.jcu.edu.au/39437/1/39437-kirkman-2011-thesis.pdf">business with a soul</a>”, this may have been less benevolent than it seems. It appears this was just an early forebear of the concept of a <a href="https://www.investopedia.com/terms/s/social-license-slo.asp">social licence to operate</a>. </p>
<p>The ability for mining companies to “buy” a social licence to operate can been seen by communities as problematic. As <a href="https://journals.sagepub.com/doi/abs/10.1177/1440783318773518">noted in previous research</a>, “measures taken by extractive industries to build support or ‘social licence’ for their developments are in fact experienced by these participants as destructive of community life”.</p>
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Read more:
<a href="https://theconversation.com/afterlife-of-the-mine-lessons-in-how-towns-remake-challenging-sites-106073">Afterlife of the mine: lessons in how towns remake challenging sites</a>
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<h2>Invest in the future during operations</h2>
<p>Once a mine is established, the focus is very much on ongoing operations. Mines seek to present themselves as part of local communities, but they typically remain very large, multinational businesses. That is, they are in the local community but not part of it. </p>
<p>Government support for mines typically continues through this period, through financial and <a href="https://www.imf.org/en/Topics/climate-change/energy-subsidies">other measures</a>. But financial benefits rarely accrue to communities, with mining royalties <a href="https://australiainstitute.org.au/post/nsw-missing-out-on-6-2b-in-coal-royalties-compared-to-queensland/">significantly less</a> than they could be.</p>
<p>Queensland recently <a href="https://www.treasury.qld.gov.au/programs-and-policies/coal-royalties/">changed coal royalties</a> so the rate increases as coal prices increase. It’s an important step for the state to secure the funds needed for the transition away from coal.</p>
<p>But this sort of forward thinking isn’t common. Mines typically deliver short-term financial gains to mine owners and wages for mine workers. </p>
<p>Set against these benefits, the costs tend to be social and environmental. </p>
<p>One obvious example is the inevitable environmental destruction that comes with mining. </p>
<p>Another can be the impacts on people’s health. For example, the effect of <a href="https://theconversation.com/pregnant-women-and-parents-misled-about-dangers-of-living-with-lead-pollution-52752">lead pollution on children</a> is a <a href="https://www.sciencedirect.com/science/article/abs/pii/S2214790X20302938">well-known problem</a> in Mount Isa.</p>
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<a href="https://theconversation.com/mount-isa-contamination-within-guidelines-but-residents-told-to-clean-their-homes-72862">Mount Isa contamination 'within guidelines' but residents told to clean their homes</a>
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<img alt="A mine processing plant and smelter lit up at night" src="https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=358&fit=crop&dpr=1 600w, https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=358&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=358&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=449&fit=crop&dpr=1 754w, https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=449&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/555953/original/file-20231025-23-mx1ha4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=449&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Children in Mount Isa have elevated levels of lead in their blood, with those living closest to the smelter recording the worst school test results.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mount-isa-mine-processing-plant-industrial-1250355163">Jason Benz Bennee/Shutterstock</a></span>
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<p>While those involved in mining receive financial benefits, the rest of the community can often find itself at an economic disadvantage. “Two-speed economies” can be seen in such mining towns. In Muswellbrook in the Hunter Valley, New South Wales, for example, <a href="https://www.abc.net.au/news/2022-09-28/housing-crisis-forces-family-into-tent-in-hunter-valley/101476812">housing disadvantage is rising</a> among those who aren’t benefiting from a mining wage. </p>
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<a href="https://theconversation.com/we-need-to-restore-the-land-as-coal-mines-close-heres-a-community-blueprint-to-sustain-the-hunter-valley-198792">'We need to restore the land': as coal mines close, here's a community blueprint to sustain the Hunter Valley</a>
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<h2>Involve locals in planning transitions</h2>
<p>Looking ahead, the people of Mount Isa undoubtedly face significant challenges, including a <a href="https://www.longpaddock.qld.gov.au/qld-future-climate/adapting/heatwaves/">far less stable climate</a>. Ensuring community voices are heard in planning mine closure is key to ensuring towns and regions benefit during and after mining.</p>
<p>After the Mount Isa mine closures were announced, the Queensland government <a href="https://statements.qld.gov.au/statements/98946">pledged</a> up to A$20 million for an “economic structural adjustment package” to support affected workers. Glencore is expected to match that funding. </p>
<p>On a local level, the Mount Isa City Council has actively worked towards securing the city’s future. In 2019 the council <a href="https://www.mountisa.qld.gov.au/downloads/file/753/investment-prospectus-mount-isa-city-council">released a prospectus</a> aimed at attracting investment “to diversify the city’s economy to reduce the impact of this minerals boom-bust cycle”. </p>
<p>While funding is available and the council is committed to forward planning, what does structural adjustment really mean for the community? </p>
<p>Managing all of the intersecting issues requires the hand of a <a href="https://nexteconomy.com.au/work/transforming-queensland-the-case-for-a-transition-authority/">co-ordinating authority</a>. Yet if all planning is done at arm’s length, it will not be able to draw on the community’s deep insights about place. </p>
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<h2>A wider problem</h2>
<p>As the energy transition <a href="https://theconversation.com/the-road-is-long-and-time-is-short-but-australias-pace-towards-net-zero-is-quickening-214570">continues</a>, Australia can expect to see many more mines close. These include coal mines in the Hunter Valley and Victoria’s Latrobe Valley. </p>
<p>And as the transition accelerates, we might expect to see other mines open, as renewable energy industries seek the <a href="https://theconversation.com/we-could-need-6-times-more-of-the-minerals-used-for-renewables-and-batteries-how-can-we-avoid-a-huge-increase-in-mining-impacts-206864">critical minerals</a> they need. This week, for example, the federal government <a href="https://www.abc.net.au/news/2023-10-25/anthony-albanese-washington-dc-critical-minerals-funding/103017910">announced</a> $2 billion in funding to support the critical minerals industry.</p>
<p>While all government support will be welcomed, it’s time to bring planning back down to the local level. Residents know their towns intimately. They should be involved in actively shaping their towns’ futures. </p>
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<a href="https://theconversation.com/we-could-need-6-times-more-of-the-minerals-used-for-renewables-and-batteries-how-can-we-avoid-a-huge-increase-in-mining-impacts-206864">We could need 6 times more of the minerals used for renewables and batteries. How can we avoid a huge increase in mining impacts?</a>
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<img src="https://counter.theconversation.com/content/216346/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For towns built on mining, mine closures have huge impacts. Because mines inevitably close, communities should be involved from the start in planning for that time.Kimberley Crofts, Doctoral Student in Sustainable Transitions, School of Design, University of Technology SydneyLiam Phelan, Senior Lecturer, School of Environmental and Life Sciences, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1976642023-02-02T05:49:49Z2023-02-02T05:49:49ZChina is extending its dealings with the Taliban as it increases its superpower status<p>China is one of the few countries that is committed to expanding its dealings with the Taliban government in Afghanistan, where it hopes to expand its use of the vast natural resources while also improving its own geopolitical security. </p>
<p>In mid-2021 <a href="https://www.swp-berlin.org/en/publication/afghanistan-the-west-fails-a-win-for-china-and-russia">China welcomed a Taliban delegation</a>, showing its willingness to recognise the Taliban government as the US signalled <a href="https://www.britannica.com/event/withdrawal-of-United-States-troops-from-Afghanistan">its planned withdrawal</a>. In early January 2023, a Chinese firm agreed to sign a 25-year contract for <a href="https://www.bbc.com/news/business-64183083">oil extraction in Afghanistan</a>. There is also the possibility that a Chinese state-owned company will be contracted to operate <a href="https://www.bbc.com/news/business-64183083">a copper mine</a> in the country. </p>
<p>It is unsurprising that as western countries withdraw almost all their links with Afghanistan, China is willing to increase its commercial presence in the country. Although traditionally its Afghan policy has not been a <a href="https://www.tandfonline.com/doi/abs/10.1080/09512748.2020.1845228">diplomatic priority</a>, it now sees opportunities.</p>
<p>Despite being one of Afghanistan’s <a href="https://brill.com/view/journals/caa/1/1/article-p133_8.xml?language=en">largest foreign investors</a> in the past and its strategic partner, China’s involvement in the country has previously been relatively limited when compared with others such as Russia and the US.</p>
<p>Arguably, its policy in regard to Afghanistan has been driven <a href="https://brill.com/view/journals/caa/1/1/article-p133_8.xml?language=en">by domestic economic interests and security issues</a>. However, in the last decade or so, China has adopted a more assertive foreign policy. At the same time, commercial interests have also led to increased Chinese involvement in Afghanistan.</p>
<h2>Useful natural resources</h2>
<p>Greater active engagement with Afghanistan will enable China to benefit in several ways. Afghanistan is one of the world’s most <a href="https://foreignpolicy.com/2022/07/11/afghanistan-taliban-mining-resources-rich-minerals/">resource-rich countries</a>, but its security conditions have constrained the development of the sector.</p>
<p><a href="https://www.payam-aftab.com/images/docs/files/000054/nf00054424-1.pdf">Some estimates</a> set the value of Afghanistan’s untapped mineral deposits, such as copper, iron and lithium, at £811.5 billion. In terms of crude oil, it has 1.6 billion barrels. As for natural gas, Afghanistan possesses 16 trillion cubic feet, and has access to 500 million barrels of natural gas liquids.</p>
<p>However, in the past, Chinese activities in Afghanistan’s mineral sector have stalled. In the late 2010s, for example, security concerns <a href="https://theconversation.com/afghanistan-has-vast-mineral-wealth-but-faces-steep-challenges-to-tap-it-166484">hindered the activities of Chinese enterprises</a> tapping into the country’s mineral resources.</p>
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<figcaption><span class="caption">China is becoming an ally of the Taliban.</span></figcaption>
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<h2>Useful Afghan resources</h2>
<p>There is another related gain in working with the Afghan natural resources sector. China’s domestic <a href="https://www.atlanticcouncil.org/blogs/energysource/chinas-energy-security-realities-and-cop27-ambitions/">energy supply </a> is limited both by geology and <a href="https://energyeducation.ca/encyclopedia/Energy_density">energy density</a>, and its dependence on other countries leads to “<a href="https://www.atlanticcouncil.org/blogs/energysource/chinas-energy-security-realities-and-cop27-ambitions/">energy security anxieties</a>”.</p>
<p>Access to Afghanistan’s natural resources, then, not only provides economic incentives for China to increase its commercial presence in the country. It also has the potential to help ease its growing demand for energy.</p>
<p>Increasing involvement in Afghanistan falls within China’s <a href="https://www.mei.edu/publications/china-prioritizes-short-term-energy-security-implications-sino-middle-east-relations">prioritisation of short-term energy security</a>. But it can become a fundamental strategic element for its long-term energy requirements.</p>
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<a href="https://theconversation.com/chinas-population-decline-is-a-result-of-decades-of-botched-family-planning-measures-and-will-have-global-implications-198017">China's population decline is a result of decades of botched family planning measures and will have global implications</a>
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<p>Afghanistan’s fragile internal security has <a href="https://www.tandfonline.com/doi/abs/10.1080/09512748.2020.1845228">affected China in two ways</a>. First, it worried that years of <a href="https://www.tandfonline.com/doi/abs/10.1080/09512748.2020.1845228">instability in Afghanistan</a> would spill over into China’s Xinjiang autonomous territory, where there is a long history of religious and ethnic tension with Beijing. This has included <a href="https://www.bbc.co.uk/news/world-asia-china-22278037">crackdowns</a> by Beijing on the Muslim Uyghur people, and widespread accusations of extensive human rights abuses.</p>
<p>Second, the instability that stems from Afghanistan negatively affects the development of China’s <a href="https://www.chathamhouse.org/2021/09/what-chinas-belt-and-road-initiative-bri">Belt and Road Initiative</a> (BRI), which is building trade routes with the rest of the world, because two of its fundamental corridors run adjacent to Afghanistan. As a global infrastructure and development investment plan encompassing over 60 countries (although there is no official count), including some from east Asia and Europe, <a href="https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative">the initiative</a> is a vehicle to expand China’s global economic and political influence. Such an expansion is paramount for China’ superpower aspirations.</p>
<p>Trade frictions with the US and other countries have increased the pressure to open other markets for China’s goods. The BRI is an effective channel to <a href="https://www.oecd.org/finance/Chinas-Belt-and-Road-Initiative-in-the-global-trade-investment-and-finance-landscape.pdf">develop new export markets</a> which can alleviate trade pressures. And although the Afghan consumer market is small, it is <a href="https://www.payam-aftab.com/images/docs/files/000054/nf00054424-1.pdf">an untapped market for Chinese goods</a> – particularly those produced in China’s western regions.</p>
<h2>Building superpower status</h2>
<p>An additional gain is geopolitical. After decades of hegemonic presence “next door” but a degree of reluctance to get involved in Afghan affairs, China seems to be somewhat ready to fill the power vacuum created by the withdrawal of western countries.</p>
<p>Greater presence in Afghanistan provides China with an opportunity to strengthen its regional power and influence. In doing so, it can contribute to the stability of Afghanistan. In turn, such a role will improve <a href="https://journals.sagepub.com/doi/10.1177/2347798916638209">China’s image</a> as a responsible rising power.</p>
<p>So far, China has been <a href="https://www.iss.europa.eu/content/afghanistan-view-china">reluctant to take on a security role</a> in Afghanistan, because this could have led to friction with other countries and increased its exposure to threats by international terrorists networks. However, a change in strategy to increase the economic stability of Afghanistan can contribute to the reduction of China’s own security vulnerabilities.</p><img src="https://counter.theconversation.com/content/197664/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jose Caballero does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China is expanding its relationship with the Taliban as a way of addressing its needs for increased energy supply.Jose Caballero, Senior Economist, IMD World Competitiveness Center, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1968122023-01-23T07:19:24Z2023-01-23T07:19:24ZCopper transformed way the world works before: it’s about to do so again<figure><img src="https://images.theconversation.com/files/503766/original/file-20230110-16-3wjggu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
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<p>Copper is all around us. The metal is both ever-present and invisible in our world. <a href="https://www.nhm.ac.uk/discover/your-mobile-phone-is-powered-by-precious-metals-and-minerals.html">Copper makes reading the words on this screen possible</a>. And the global spread of <a href="https://www.sciencedirect.com/science/article/abs/pii/S030142070900021X">artificial light, electric power and telecommunications</a> all required ever-increasing quantities of copper. </p>
<p>Where does all of this copper come from? How was it produced, distributed, controlled, and sold on an ever-increasing scale? These are some of the questions addressed in a recently published book, <a href="https://www.ubcpress.ca/born-with-a-copper-spoon">Born with a Copper Spoon: A Global History of Copper</a>.</p>
<p>The book is a global study of a metal that has transformed the globe. Contributors to the book cover North America, Latin America, Europe, Central Africa, the Middle East, East Asia and Oceania and stretch from the early nineteenth to the early twenty-first centuries.</p>
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<a href="https://theconversation.com/zambias-copper-mines-hard-baked-racism-into-the-workplace-by-labelling-whites-expats-188751">Zambia's copper mines hard-baked racism into the workplace by labelling whites 'expats'</a>
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<p>Why are these important questions? Because of the ubiquity of copper and the fact that the world’s collective rehab from fossil fuels may cause a renewed addiction to a new mineral-based economy. Electrification, the pillar of the green transition, requires huge amounts of copper. Projections expect <a href="https://www.cnbc.com/2022/07/14/copper-is-key-to-electric-vehicles-wind-and-solar-power-were-short-supply.html">a doubling of copper consumption by 2035</a> in order to reach zero-emission energy goals. Faced with the enormous task of electrification, the share of the global energy sector will increase to 40% of total copper consumption <a href="https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/executive-summary">in the next two decades</a>.</p>
<p>They are also important questions because countries that have an abundance of copper have failed to benefit from it. Zambia is a case in point. It produces <a href="https://openknowledge.worldbank.org/handle/10986/2772">6%</a> of the world’s copper but is still one of the poorest countries in the world.</p>
<p><a href="https://www.ubcpress.ca/born-with-a-copper-spoon">Born with a Copper Spoon</a> requires us to think differently about our material lives and the energies we use, by looking at the places where our minerals are actually produced and the way in which the production and distribution of these minerals are organised. </p>
<p>Will the next world of copper finally evolve as the long-anticipated resource blessing, or is a new global scramble, in which states and companies seek to secure access to the precious metal, going to determine otherwise? Copper became associated with the idea of a resource curse for many people. Zambia’s first president, Kenneth Kaunda, <a href="https://www.nytimes.com/1978/06/18/archives/kaunda-is-squeezed-from-many-sides.html">once remarked</a> that his country was “paying the price for having been born with a copper spoon in our mouths”.</p>
<p>He knew too well that the abundance of copper had caused Zambia a host of problems.</p>
<h2>Worlds of copper</h2>
<p>Our book looks at different “worlds of copper” that have arisen over the last century and a half. The term “<a href="https://doi.org/10.1017/S1740022814000345">world of copper</a>” was first coined by British historians Chris Evans and Olivia Saunders to describe a globally integrated production system that connected the smelters of South Wales to copper mines across the globe between 1830 and 1870.</p>
<p>We see this as the first world of copper. This world was then supplanted by a second world of copper centred on the US. This involved the rise and dominance of American mining companies as huge integrated enterprises controlling the production, processing and distribution of the commodity. “From mine to consumer” was the slogan of the notorious American copper mining company Anaconda, active in Montana and Chile. Underpinning the American world of copper was control over the production chain through the use of new business organisations and technologies.</p>
<p>Technological changes in mining and processing that were quite literally ground-breaking allowed for ever-greater quantities of copper to be mined and processed. Open pit extraction was first developed in North America and soon spread to Latin America and Central Africa, with often comprehensively destructive environmental consequences. Many of these pits are still being mined today.</p>
<p>The American world of copper denotes both the power of American companies and the model of controlling copper chains that is eagerly copied by non-American copper companies. This patterns becomes global: it is applied in Japan, the European empires that control the Copperbelt as well as in Latin America.</p>
<p>In the mid-twentieth century, the American world of copper disintegrated during decolonisation in the face of resource nationalism and a shifting geography of production. A wave of nationalisations by new states brought about a postcolonial world of copper, built around state power, economic sovereignty and state-level international co-operation. Developing states saw copper as their ticket to economic development and modernity. The dream of the red metal was however short-lived.</p>
<p>This postcolonial world of copper collapsed in the 1990s after a long slump in the industry. Multinational private companies reasserted themselves over the industry, but the US and European companies never regained their once dominant position.</p>
<p>Each copper world was marked by several defining features – underlying institutions, organisations, labour practices – and produced by global connections and interactions. Identifying and understanding consecutive worlds of copper is crucial to how we understand the development of the global copper industry.</p>
<p>Our current energy transition could herald a new copper world. Renewed demand for copper will likely intensify mining activity in DR Congo, Zambia and other parts of the African continent and could place states in a stronger bargaining position.</p>
<h2>The need to think differently</h2>
<p>Copper’s status as a global industry has waxed and waned. The history of the metal is not a story of steadily increasing and depending global connections as we move towards the present. It is also a history of disconnections and efforts to de-couple regions from the global economy.</p>
<p>Our book is a contribution to global history and the story of copper is necessarily a global one as extracting, refining, buying, shipping and consuming the metal takes place around the world. Global history is about more than connections, however.</p>
<p>Our book is also about periods of deglobalisation and attempts to sever connections, especially in the mid-twentieth century when a bitter contest over ownership of mineral resources briefly threatened a major realignment of the world economy. In 1967, several of the world’s largest copper producers (Congo, Chile, Peru and Zambia) met in Lusaka to establish a copper cartel that would control the industry and turn an abundance of natural resources into national economic growth.</p>
<p>That’s an ambition that still needs to be fulfilled.</p><img src="https://counter.theconversation.com/content/196812/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Our book was funded by the Norwegian Research Council (grant number 249723).</span></em></p><p class="fine-print"><em><span>Robrecht Declercq receives funding from Research Foundation Flanders (FWO) and is guest professor at the Université Saint Louis (Brussels) where he teaches global economic history</span></em></p>The current energy transition could herald a new copper world. But will it be a long-anticipated resource blessing or yet another global scramble for the precious metal?Duncan Money, Researcher, Leiden UniversityRobrecht Declercq, Postdoctoral Researcher , Ghent UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1957642023-01-08T08:45:57Z2023-01-08T08:45:57ZClimate change action could set off a copper mining boom: how Zambia can make the most of it<figure><img src="https://images.theconversation.com/files/501330/original/file-20221215-12-7qdic2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Batches of copper sheets stored in a warehouse at Mopani mines, Mufilira, Zambia. </span> <span class="attribution"><span class="source">Per-Anders Pettersson/Getty Images</span></span></figcaption></figure><p>At last year’s US Africa leaders summit in Washington the US signed an historic <a href="https://news.bloomberglaw.com/environment-and-energy/us-agrees-to-support-ev-battery-plan-by-congo-zambia">memorandum of understanding</a> with Zambia and the Democratic Republic of Congo to develop an electric vehicle battery supply chain. </p>
<p>At the summit, Zambian President Hakainde Hichilema also announced that Kobold metals, an exploration firm backed by billionaires Bill Gates, Jeff Bezos and Richard Branson, <a href="https://www.reuters.com/world/africa/billionaire-backed-kobold-metals-invest-zambia-copper-mine-2022-12-14/">will invest US$150 million to develop a new mine in Zambia</a>.</p>
<p>Zambia is particularly well positioned to supply what the world needs. It has substantial reserves of copper and cobalt, critical metals for the transition from fossil fuels to renewable energy. Due to their broad uses in wind and solar powered technology and electric vehicle production, these metals will play a <a href="http://hdl.handle.net/10986/28312">crucial role</a> in a low carbon future. </p>
<p>Copper demand is expected to <a href="https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/mineral-requirements-for-clean-energy-transitions#abstract">increase</a> up to threefold by 2040 while cobalt demand is expected to rise over 20 fold. </p>
<p>Zambia has <a href="http://hdl.handle.net/10986/2772">6%</a> of the world’s copper reserves, and the metal accounts for up to <a href="https://www.aa.com.tr/en/economy/falling-copper-prices-hit-zambia-in-pocket/73273">80%</a> of its export earnings. </p>
<p>The coming copper boom presents Zambia with an extraordinary opportunity – to enable mining profits as well as to power inclusive growth. </p>
<p>But, as Zambia’s history shows, this is easier said than done. Successive rises in copper prices have not translated into reducing poverty or inequality. Zambia is still the <a href="https://worldpopulationreview.com/country-rankings/wealth-inequality-by-country">fourth most unequal country</a> in the world. </p>
<p>Based on our <a href="https://academic.oup.com/wbro/article/36/2/164/5813434">published</a> research and <a href="https://www.sciencedirect.com/science/article/pii/S0301420720309983?via%3Dihub">expertise</a> – including work with the <a href="https://www.theigc.org/">International Growth Centre</a> in the London School of Economics and engagement with the Zambian government on a research agenda for the country’s mining sector – we argue that Zambia can benefit from the energy transition underway. But it can only do so by harnessing the non-tax benefits of mining. </p>
<p>Non-tax benefits are the opportunities that stem from the mining activity itself. Most mining firms spend the bulk of their revenue on operational and capital expenditures, a larger share than goes towards either profits or government tax. </p>
<p>A non-tax benefit approach would mean that Zambian companies and workers would participate in mining’s value chain, and Zambian communities would benefit from the infrastructure needed to extract and move the bulk materials. </p>
<p>In the past, Zambia has been more focused on capturing tax benefits through changes to the fiscal regime. But a balanced approach of a stable mining taxation policy and the pursuit of non-tax benefits could deliver broader gains.</p>
<h2>Zambia’s unequal growth story</h2>
<p>Zambia’s track record for converting commodity booms into tangible benefits is mixed at best. </p>
<p>Take the last commodity cycle. Sparked by growing demand from China, copper prices began to <a href="https://www.ijstr.org/final-print/oct2015/Analysis-Of-Coppers-Market-And-Price-focus-On-The-Last-Decades-Change-And-Its-Future-Trend.pdf">increase</a> in 2004. From 2003 to 2006 the price of copper, Zambia’s main export, more than tripled. Zambia’s economic growth rate took off in response. (See Figure 1.)</p>
<p>Yet there was no corresponding impact on <a href="https://www.theigc.org/project/economic-growth-inequality-poverty-estimating-growth-elasticity-poverty-zambia/">poverty and income inequality</a>. Zambia’s Gini coefficient, a measure of inequality, actually rose slightly during the cycle. </p>
<p>Even Zambia’s poverty rate, as measured by the percentage of the population living on less than US$2.15 per day (in 2017 purchasing power parity dollars), rose through 2010 before starting to reverse. </p>
<p>That year, a stunning 68.5% of Zambia’s people were living in poverty in a country where annual GDP per person was a much more impressive US$3,125.52 (also in 2017 dollars) – four times the poverty rate. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=462&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=462&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501825/original/file-20221219-24-54k1cg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=462&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Figure 1.</span>
<span class="attribution"><span class="source">Authors' computations from World Bank Data</span></span>
</figcaption>
</figure>
<p>During commodity booms, governments may be tempted to focus on capturing short-term gains, which are frequently understood in monetary terms and primarily as tax benefits. </p>
<p>For Zambia, this dynamic was overlaid on top of the disastrous advice the government had received on how to reopen its previously nationalised copper sector a decade earlier.</p>
<p>The Zambian government entered into unfavourable terms with new mine owners, offering generous tax incentives that led to a loss <a href="https://link.springer.com/chapter/10.1057/9780230115590_3">in tax revenue</a> just a handful of years before the copper price rose.</p>
<p>This fuelled a fixation on getting tax revenue from the sector.</p>
<p>In 2008, amid the boom, Zambia introduced a <a href="https://www.wider.unu.edu/publication/zambia%E2%80%99s-mining-windfall-tax-0">windfall tax</a> on mining profits in an attempt to capture more benefits from the sector. Less emphasis was placed on the largely untapped non-tax benefits. </p>
<h2>Why non-tax benefits?</h2>
<p><a href="https://unctad.org/system/files/non-official-document/unda1617ld03_mining_SA_en.pdf">Non-tax benefits</a> are where the real potential to drive inclusive growth lies, as we detail below. </p>
<p>Figure two is a hypothetical one that illustrates the point. For every $100 generated in revenue, imagine that $70 is spent on operational and capital expenditures, that is, running the mine and expanding operations. (This is not unrealistic: <a href="https://www.researchgate.net/publication/304909452_Doubling_Energy_Productivity_by_2030_-_Re-Energising_the_Mining_Sector_to_Improve_Its_Competitiveness_-_Full_Report">margins</a> in the sector are not very high most of the time.)</p>
<p>If more of this were spent within the country rather than being sent abroad to import the majority of goods and services, it could contribute to business opportunities for Zambian companies and high-paying jobs for Zambian workers. </p>
<p>In 2012, the costs of goods and services consumed “upstream” by the Zambian mining sector was valued at <a href="https://academic.oup.com/book/40396/chapter/347211221">US$2.5 billion</a> annually. Spending more of that domestically would have a much wider impact. It would create income and jobs directly. And that income would finance further consumption and investment through the local economy. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=423&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=423&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501667/original/file-20221217-20-d0b0gl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=423&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Figure 2.</span>
<span class="attribution"><span class="source">Authors’ illustration</span></span>
</figcaption>
</figure>
<p>Non-tax benefits can also emerge from “sidestream” projects related to mining expenditure, adding value to the wider economy. The power, rail and road projects that enable mining activity can provide the backbone to make other economic activities competitive. </p>
<p>“Downstream” linkages are also possible – delivering the mining firm’s output to other firms that process it into intermediate goods and final products. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=342&fit=crop&dpr=1 600w, https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=342&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=342&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=430&fit=crop&dpr=1 754w, https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=430&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/498508/original/file-20221201-6347-74hj7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=430&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Figure 3.</span>
<span class="attribution"><span class="source">Lombe 2020, adapted from Fessehaieet al. 2015:53</span></span>
</figcaption>
</figure>
<h2>What would non-tax benefits look like for Zambia?</h2>
<p>Figure three shows the breakdown of Zambian mining firms’ goods and services expenditure. </p>
<p>In 2012, 96% of all service were provided by foreign firms. Only 4% were provided by Zambian-owned firms. These were mostly supplying non-core goods and services such as catering, security and office maintenance. </p>
<p>Capturing more of mining’s upstream value chain in Zambia represents a major growth opportunity.</p>
<p>One way to make this happen is through a <a href="https://doi.org/10.1093/oso/9780198851172.003.0019">local content strategy</a> that would give a greater role to Zambian suppliers and workers in the mining sector. </p>
<p>Another growth opportunity is the side-stream linkages with the electricity generation sector. For example, a mining company could sell surplus renewable power to the grid.</p>
<h2>Zambia shouldn’t ignore mining taxation</h2>
<p>By advocating for non-tax benefits, we are not suggesting that taxation be ignored. Copper reserves over time will run out, or copper will be rendered obsolete by some new technology. This is the risk with all natural resources. A government must generate tax revenue from its mineral resources while it can.</p>
<p>Multinational companies can find ways to pay as little tax as legally possible. In the past, Zambia tried to stop this by tinkering repeatedly with the mining tax system – without getting results. </p>
<p>Better would be to leave the tax regime in place and instead focus on monitoring and collection. </p>
<h2>A governance dividend</h2>
<p>Zambia’s government must keep in mind that poor governance will be a constraint to achieving any future – tax or non-tax – benefits. </p>
<p>This was the case during Zambia’s last boom. But the country is currently reaping a governance dividend with a new investor-friendly president, restored donor confidence and a recently secured IMF deal. </p>
<p>The conditions are in place for Zambia to use this boom to generate inclusive development.</p><img src="https://counter.theconversation.com/content/195764/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The coming copper boom presents Zambia with an extraordinary opportunity – not only to enable mining profits, but to power inclusive growth.Twivwe Siwale, Head of Tax for Growth, International Growth Centre, London School of Economics and Political ScienceEric Werker, William Saywell Professor of International Business, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1855802022-06-29T19:55:33Z2022-06-29T19:55:33ZAustralia can help ensure the biggest mine in PNG’s history won’t leave a toxic legacy<figure><img src="https://images.theconversation.com/files/471307/original/file-20220628-17-gv5xbh.jpg?ixlib=rb-1.1.0&rect=18%2C0%2C5988%2C4016&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The COVID pandemic slowed mining operations across the Pacific. But as economic activity returns, an Australia-based company is poised to pursue what would be the <a href="https://www.theguardian.com/world/2020/oct/08/plan-for-largest-mine-in-png-history-appears-to-disregard-human-rights-un-says">largest</a> mine in Papua New Guinea’s history. </p>
<p>The vast gold and copper project, known as the Frieda River mine, would also include a hydroelectric plant and a dam with a storage capacity for around <a href="https://friedariver.com/wp-content/uploads/2019/09/Chapter-5-Description-of-the-Proposed-Development.pdf">4.6 billion tonnes</a> of mine tailings and waste rock.</p>
<p>The project is awaiting approval by the PNG government. However, locals, conservationists and experts say it could cause catastrophic harm to one of the world’s most important river systems and should not proceed as proposed.</p>
<p>Australia is PNG’s largest development partner. As resource extraction expands across the Pacific, the new Labor government is well placed to help our neighbours ensure mining activity doesn’t harm people or the environment.</p>
<figure class="align-center ">
<img alt="man prepares food over fire" src="https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/471318/original/file-20220628-13-k3n6bj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The project threatens catastrophic harm to one of the world’s most important river systems, and the people who depend on it.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Remote, unstable terrain</h2>
<p>The Frieda River mine is <a href="https://friedariver.com">proposed by</a> Brisbane-based, Chinese-owned company Pan Aust. </p>
<p>The project centres on the Frieda River copper-gold deposit located in the tropical mountain ranges of northwest PNG.</p>
<p>The river flows into the Sepik River Basin, <a href="https://whc.unesco.org/en/tentativelists/5065/%20%C2%A0%20%20%C2%A0">one of</a> the world’s great river systems. It’s the largest unpolluted freshwater system in New Guinea and among the largest freshwater basins in the Asia-Pacific. </p>
<p>The Frieda River deposit was discovered in the 1960s. It lies in extremely remote terrain, along the Pacific Ring of Fire which is prone to seismic activity.</p>
<p>The mine would produce tailings (or waste materials) containing sulphide, which turns into sulphuric acid when exposed to oxygen. For this reason, the tailings must be permanently covered by water.</p>
<p>The proposed mine’s location, high in the mountains, means a tailings accident could devastate the entire Sepik River Basin.</p>
<p>About 430,000 people depend on the Sepik River and nearby forests for their livelihood. The proposal has <a href="https://savethesepik.org/campaign/frieda-river-mine/">galvanised</a> massive opposition from both locals and others.</p>
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Read more:
<a href="https://theconversation.com/chinas-push-into-png-has-been-surprisingly-slow-and-ineffective-why-has-beijing-found-the-going-so-tough-140073">China's push into PNG has been surprisingly slow and ineffective. Why has Beijing found the going so tough?</a>
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<figure class="align-center ">
<img alt="people in boat on grey river" src="https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/471074/original/file-20220627-15980-ag1u74.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Villagers travelling along PNG’s Fly River which is choked by tailings from the Ok Tedi mine.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Downplaying the risks</h2>
<p>In 2020, ten independent experts including myself, were commissioned by PNG’s Centre for Environmental Law and Community Rights to individually review the project’s “<a href="https://friedariver.com/eis/">environmental impact statement</a>”. The work was undertaken pro bono. </p>
<p>I’m an experienced gold exploration geologist and environmental scientist. In my <a href="https://savethesepik.org/wp-content/uploads/2020/04/5.-Michael-Main-Geological-and-social.pdf">review</a>, I found the statement downplayed or obscured the proposal’s extraordinary level of risk. </p>
<p>First, it omitted a report by design engineers that analysed the extreme consequences of dam failure. </p>
<p>Second, the main report failed to mention the dam would need an intensive inspection and maintenance regime “in perpetuity”. In other words, a potentially toxic dam in a remote part of a very poor country requires highly skilled and experienced professionals to maintain it – not just for the 33-year life of the mine, but forever.</p>
<p>Our reports <a href="https://www.abc.net.au/radio-australia/programs/pacificbeat/un-human-rights-experts-raise-concerns-over-frieda-mine/12716156">prompted</a> a group of UN Special Rapporteurs to write <a href="https://spcommreports.ohchr.org/TmSearch/Mandates?m=27">letters of concern</a> to the governments of PNG, Australia, China and Canada, where companies involved in the joint venture have ties.</p>
<p>The letters said the mine’s development appeared to “disregard the human rights of those affected … given the nature of the project it could undermine the rights of Sepik children to life, health, culture, and a healthy environment, including the rights of unborn generations.”</p>
<p>The Conversation contacted Pan Aust for a response to these claims. In a statement, the company said it was “respectfully engaged in the Government of Papua New Guinea’s approvals process” and as such, it was inappropriate to provide a public comment.</p>
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<figure class="align-center ">
<img alt="villagers sit in hall" src="https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/471319/original/file-20220628-13-5luxdt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The UN said the mine’s development seemed to disregard the human rights of those affected.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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</figure>
<h2>New safeguards are needed</h2>
<p>Inadequate consideration of a mine’s social and environmental impact is rife cross the Pacific. And PNG provides many examples of the catastrophes that can result.</p>
<p>Tailings from BHP’s <a href="https://wwf.panda.org/discover/knowledge_hub/where_we_work/new_guinea_forests/problems_forests_new_guinea/mining_new_guinea/ok_tedi_forest_new_guinea/">ill-fated Ok-Tedi mine</a>, located in the same mountain range as the proposed Frieda River mine, severely damaged nearby rivers. </p>
<p>And environmental damage from the <a href="https://www.theguardian.com/world/2022/feb/11/panguna-mine-at-centre-of-bloody-bougainville-conflict-set-to-reopen-after-30-years">Panguna copper mine</a> was a key factor in community unrest and the Bougainville civil war.</p>
<p>Recent <a href="https://www.sciencedirect.com/science/article/abs/pii/S0048969720338973">research</a> into governance of mining in PNG found government agencies were under-resourced, leaving “companies as effectively self-regulating”. </p>
<p>Proponents of mining in PNG frequently cite its contribution to economic development. But for the benefits to be realised, resources must be extracted in a way that is environmentally, socially and economically sustainable.</p>
<figure class="align-center ">
<img alt="large open cut mine" src="https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/471527/original/file-20220629-15-a8rbm7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Panguna copper mine, which triggered major civil unrest.</span>
<span class="attribution"><span class="source">Ilya Gridneff/AAP</span></span>
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</figure>
<p>New laws are needed to ensure resource extraction projects in PNG don’t cause long-lasting social and environmental damage. This should include mandatory, transparent and independent reviews of projects. </p>
<p>Australia has extensive experience with environmental regulation of mining projects and can assist in this regard. Such assistance should be delivered in a way that strengthens relations between Australia and PNG, and <a href="https://devpolicy.org/publications/reports/DFAT-AusAIDIntegrationReview-FullVersion.pdf">empowers and equips</a> the smaller nation. </p>
<p>Sustainable development for our Pacific neighbours is in Australia’s strategic interests. Australian companies often benefit significantly from resource extraction in PNG, creating an extra responsibility to ensure better outcomes.</p>
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<strong>
Read more:
<a href="https://theconversation.com/a-brutal-war-and-rivers-poisoned-with-every-rainfall-how-one-mine-destroyed-an-island-147092">A brutal war and rivers poisoned with every rainfall: how one mine destroyed an island</a>
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<img src="https://counter.theconversation.com/content/185580/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Main was one of ten independent expert reviewers of the Environmental Impact Statement for the Sepik Development Project and advises on resource extraction projects in the Pacific.</span></em></p>The project threatens catastrophic harm to one of the world’s most important river systems, and the people who depend on it.Michael Main, Visiting Scholar, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1578722021-04-07T20:16:43Z2021-04-07T20:16:43ZClean energy? The world’s demand for copper could be catastrophic for communities and environments<figure><img src="https://images.theconversation.com/files/393711/original/file-20210407-17-p4pcgb.jpg?ixlib=rb-1.1.0&rect=8%2C25%2C5599%2C3707&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The benefits of switching to clean energy are huge. As with any industrial activity, the transition has potential environmental and social impacts.</p>
<p>As we head towards net-zero emissions, record quantities of copper will be required. Copper is critical for solar panels, wind turbines, electric vehicles and battery storage.</p>
<p>Unfortunately, we’re headed for a <a href="https://www.visualcapitalist.com/the-looming-copper-supply-crunch/">supply crunch</a>. <a href="https://www.bloomberg.com/news/articles/2021-03-19/the-world-will-need-10-million-tons-more-copper-to-meet-demand">Market analysts</a> estimate the annual copper supply shortfall could be as high as 10 million tonnes by 2030 if no new mines are built. This means <a href="https://agmetalminer.com/2021/02/22/copper-price-rises-as-the-metals-bull-story-continues/">prices</a> are on the rise, giving miners an incentive to bring new copper mines to market. </p>
<p>The complexity of these new mines will be unprecedented. Unless mining is done differently, rushing to bring these projects into production could unleash unacceptable, catastrophic impacts onto local people and environments. </p>
<h2>A golden age for copper</h2>
<p>Until recently, the copper market has been flat. Prices have been low, and it has not been a good environment for producers. The market is now on the move. </p>
<p>The demand for copper and other <a href="https://www.nature.com/articles/s41467-020-18661-9">energy transition minerals</a> has sparked predictions of a commodity <a href="https://www.c-resource.com/2021/03/23/another-commodity-supercycle-is-looming/">boom</a>, and a <a href="https://www.australianmining.com.au/news/bhp-predicts-golden-age-of-exploration-discoveries/">golden age</a> for mineral exploration.</p>
<p>On April 12-13, major producers including <a href="https://www.bhp.com/our-approach/think-big/copper/">BHP</a>, <a href="https://www.riotinto.com/">Rio Tinto</a> and <a href="https://www.angloamerican.com/">Anglo American</a> will convene for the <a href="https://events.crugroup.com/copper/home">World Copper Virtual Conference</a> to gather market intelligence. </p>
<p>But in the face of high global demand, it’s critical these big companies don’t gloss over copper’s sustainability challenges. </p>
<h2>4 major sustainability challenges</h2>
<p>There are four major challenges the mining industry faces in the impending copper boom. How well these challenges are overcome will determine who wins and loses in the energy transition. </p>
<p><strong>1. Unearthed copper deposits are locked up in remote and difficult locations</strong></p>
<p>Unearthed copper deposits — known as “orebodies” — are <a href="https://www.sciencedirect.com/science/article/pii/S0959652619305359">often found in places</a> such as the high Andes, the Arctic, and the deep sea. </p>
<p>The social, environmental and technical challenges of projects in these locations will be greater than before. For example, BMW, Samsung and Volvo have just backed calls for a <a href="https://www-bbc-com.cdn.ampproject.org/c/s/www.bbc.com/news/amp/science-environment-56607700">moratorium</a> on deep sea mining. </p>
<p><strong>2. Many proposed projects face public opposition</strong></p>
<p>This includes major projects such as <a href="https://www.resolutioncopper.com/">Resolution Copper</a> and <a href="https://www.mining-technology.com/features/pebble-mine-alaska/">Pebble</a> in the US, <a href="https://news.mongabay.com/2020/08/officials-quash-plan-for-now-to-develop-philippines-biggest-copper-mine/">Tampakan</a> in the Philippines, and <a href="https://www.theguardian.com/world/2021/mar/14/entire-villages-would-be-wiped-out-if-natural-disaster-hit-dam-on-png-mine-critics-say">Frieda River</a> in Papua New Guinea. </p>
<p>Public opposition towards these and other large-scale copper projects means they could face difficult legal battles before these projects are permitted to go ahead. </p>
<p><strong>3. Future copper mines are projected to be lower grade and deeper</strong></p>
<p>Grade is a measure of the how much valuable metal there is in the ore body (deposit). Deeper, lower grade orebodies means new copper mines are likely to generate more waste rock, more <a href="https://theconversation.com/world-first-mining-standard-must-protect-people-and-hold-powerful-companies-to-account-144285">tailings</a>, and hazardous elements such as arsenic. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/world-first-mining-standard-must-protect-people-and-hold-powerful-companies-to-account-144285">World-first mining standard must protect people and hold powerful companies to account</a>
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<p>Tailings are the residues from mining and minerals processing, and is made up of finely ground rock, chemicals and water. If the projected demand is met, we calculate the world will produce <a href="https://www.youtube.com/watch?v=JlbvAtQfsTk&t=14s">more than nine times</a> the amount of copper tailings between 2000 and 2050, than in the entire century prior. </p>
<p>Meanwhile, the industry faces a <a href="https://shop.wolterskluwer.com.au/items/10088235-0001S">crisis of credibility</a> over its management of this hazardous waste.</p>
<p><strong>4. New copper mines will likely be located in politically and ecologically sensitive areas</strong></p>
<p><a href="https://www.sciencedirect.com/science/article/pii/S0959652619305359">Our research</a> from 2019 found 65% of copper ore bodies that haven’t been mined are in areas with high water risk: too little water means miners compete for it among other local water users, and too much means waste can be difficult to contain. </p>
<p>Almost half (47%) of these ore bodies occur on or close to Indigenous peoples’ lands, and 64% within or near areas critical to <a href="https://www.nature.com/articles/s41467-020-17928-5?mkt_tok=eyJpIjoiTUdFd1lXSmlOV0l4TnpBMCIsInQiOiJUVTg1XC9oMmRsMTUwSnVMYTV2MU9wUzRLWnVBM2pPRmF6M3BBVk9ialwvYkl1TVUyVHBVTWxiN0FOcjZMY25UT2htZDRVVSt4eldpYzVsMmQ1c2NvMVBYM1o0WHZIeTBLcm1FQWRlUVdzQUtLMEFLdUFrSkk2ODJjYWlBY2o3WnV6In0%3D">biodiversity</a> conservation. 50% are in socially and politically fragile countries, such as the Democratic Republic of Congo.</p>
<h2>A simple price rise won’t solve major issues</h2>
<p>In the past, the mining industry has relied on rising prices to address supply shortfalls. Higher metal prices give companies the financial capital they need to operate in difficult locations and invest in new mining technologies.</p>
<p>Some of this capital will support sustainability improvements, such as recycling and reductions in water and energy use. But many of the sustainability challenges we’ve outlined above are not price sensitive. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/a-brutal-war-and-rivers-poisoned-with-every-rainfall-how-one-mine-destroyed-an-island-147092">A brutal war and rivers poisoned with every rainfall: how one mine destroyed an island</a>
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<p>Mining companies cannot pay their way out of biodiversity loss, extreme poverty, and corruption risk. If they don’t engage these big challenges before the copper boom gets underway these impacts will be baked in mining’s future legacy, without clarity about who takes responsibility in the long term.</p>
<p>This would add to the devastating impacts existing mines have already caused. One famous example is the Panguna mine in <a href="https://theconversation.com/a-brutal-war-and-rivers-poisoned-with-every-rainfall-how-one-mine-destroyed-an-island-147092">Bougainville</a>, which led to massive environmental damage and triggered a civil war.</p>
<p>What’s more, intensifying social and environmental impacts of copper mines could jeopardise the long-term supply of copper. If opposition grows, and supply stalls, then so too will the clean energy transition.</p>
<h2>So what are the options?</h2>
<p>As demand for copper moves into overdrive, we are at a crossroads.</p>
<p>One option is to support large-scale copper mining and the clean energy transition for the greater good of the planet. Miners would do their best to minimise impacts, but we’d accept there’ll be collateral damage for local communities. This is far from the latest commitment to “<a href="https://globaltailingsreview.org/global-industry-standard/">zero harm</a> to people and the environment” that the world’s largest companies recently made to <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/bse.2613">tailings management</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/renewables-need-land-and-lots-of-it-that-poses-tricky-questions-for-regional-australia-156031">Renewables need land – and lots of it. That poses tricky questions for regional Australia</a>
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<p>A second option is to insist miners exhaust all opportunities to avoid harm. This is because sacrificing the interests of local people in the interests of a greater good would not be considered responsible, as it does not align with the concepts of equity and fairness that underpin the <a href="https://www.un.org/en/climatechange/paris-agreement">Paris Agreement</a>. </p>
<p>This second approach would require significant improvements in managing social and environmental impacts of copper mining. It may also mean reducing global demand for copper, finding substitutes, and making hard choices about not developing mines if the risks to local people and the environment are too high. Doing this would require a wholesale restructuring of the function of global commodity markets.</p>
<p>We may not yet have a solution, but as the world prepares for this year’s major <a href="https://ukcop26.org/">Climate Change Conference</a> in Glasgow, we must start to ask: what kind of justice are we seeking in the “<a href="https://onlinelibrary.wiley.com/doi/full/10.1002/sd.2163">just transition</a>”, and for whom?</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-aboriginal-people-have-little-say-over-energy-projects-on-their-land-139119">Why Aboriginal people have little say over energy projects on their land</a>
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<p><em>Update: an earlier version of this article incorrectly said Pebble mine is located in Canada. This has been corrected.</em></p><img src="https://counter.theconversation.com/content/157872/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deanna Kemp is a trustee of the Institute for Human Rights and Business (IHRB); and a member of the International Council on Mining and Metals' (ICMM) independent expert review panel. She is chief investigator of an ARC Linkage grant on public-private inquiries in mining. The Centre for Social Responsibility in Mining (CSRM) at UQ conducts applied research with mining companies, governments and mine-affected communities globally</span></em></p><p class="fine-print"><em><span>John Owen is a co-investigator of an ARC Linkage grant on public-private inquiries in mining. The Centre for Social Responsibility in Mining (CSRM) at UQ conducts applied research with communities, governments, and mining companies, including Rio Tinto, Anglo American and BHP.</span></em></p><p class="fine-print"><em><span>Richard K Valenta is the Chair of the research committee for the Queensland Exploration Council. The WH Bryan Mining and Geology Research Centre (BRC) and the Julius Kruttschnitt Mineral Research Centre (JKMRC) conduct applied research for mining companies and governments in Australia and internationally.</span></em></p><p class="fine-print"><em><span>Eleonore Lebre does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Unless mining is done differently, rushing to bring copper mines into production could unleash unacceptable, catastrophic impacts.Deanna Kemp, Professor and Director, Centre for Social Responsibility in Mining, The University of QueenslandEleonore Lebre, Research Fellow, Centre for Social Responsibility in Mining, The University of QueenslandJohn Owen, Professorial Research Fellow, The University of QueenslandRichard K Valenta, Director - WH Bryan Mining and Geology Research Centre - The Sustainable Minerals Institute, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1390072020-05-28T13:50:16Z2020-05-28T13:50:16ZCan UK fossil fuel companies now be held accountable for contributing to climate change overseas?<figure><img src="https://images.theconversation.com/files/336750/original/file-20200521-102651-tw0tvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Victoria Falls viewed from Zambia. A case brought by Zambian farmers in UK courts could have international implications.</span> <span class="attribution"><span class="source">FCG / shutterstock</span></span></figcaption></figure><p>A ruling by the UK Supreme Court could have huge implications for British companies accused of environmental damage overseas. The April 2019 decision, in a case brought by a group of Zambian farmers against a London-based mining firm, establishes that UK parent companies can be held liable under UK law for the actions of their foreign subsidiaries. I analysed the implications of this case together with my colleague Felicity Kalunga, a PhD researcher at Cardiff University and a legal practitioner in Zambia, and our findings have just been published in <a href="https://www.cambridge.org/core/journals/transnational-environmental-law/article/transnational-corporate-liability-for-environmental-damage-and-climate-change-reassessing-access-to-justice-after-vedanta-v-lungowe/7D1393F2E3F48267CB395F39A9CD5340">Transnational Environmental Law</a>.</p>
<p>The idea of corporate accountability for climate change is not new. More than a decade ago, a group of US citizens whose property was destroyed during Hurricane Katrina <a href="https://harvardlawreview.org/wp-content/uploads/pdfs/vol_12402_comer_v_murphyoil.pdf">sued some of the world’s largest fossil fuel companies</a>, including ExxonMobil, Chevron, Shell, BP and others, claiming that the greenhouse gases emitted by these companies contributed to climate change, which added to the ferocity of the hurricane, thus causing greater harm. Around the same time, an Alaskan village <a href="https://www.business-humanrights.org/en/kivalina-lawsuit-re-global-warming">sued the very same companies</a>, seeking compensation for its forced relocation resulting from melting sea ice. </p>
<p>Both cases were dismissed, and the courts did not even address the question of whether companies can be held accountable for climate change. But similar actions have since emerged around the world, with the US being a <a href="https://insideclimatenews.org/news/04042018/climate-change-fossil-fuel-company-lawsuits-timeline-exxon-children-california-cities-attorney-general">hotspot for such lawsuits</a>. </p>
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<a href="https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336726/original/file-20200521-102678-125tgbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Kivalina, Alaska: this native Iñupiat community claimed that a shortened sea ice season had left it exposed to strong waves and storm surges.</span>
<span class="attribution"><span class="source">ShoreZone / flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>For their part, the UK courts have not yet addressed the issue of corporate accountability for climate change – perhaps surprising, since some British companies, most notably BP, are among the <a href="https://climateaccountability.org/carbonmajors.html">largest corporate contributors to global greenhouse gases</a>. This, however, may change soon, and it may not be just UK claimants suing UK companies, but also foreign claimants, pursuing litigation against these companies for their foreign subsidiaries’ contribution to climate change. </p>
<h2>Zambian farmers go to court, in the UK</h2>
<p>A catalyst for this could be the decision of the UK Supreme Court in the case mentioned above: <a href="https://www.supremecourt.uk/cases/uksc-2017-0185.html">Vedanta v. Lungowe</a>. At first glance, the case has nothing to do with fossil fuels or climate change. The case was brought by a group of 1,826 Zambian farmers, including one Mr Lungowe, who claimed that a copper mine had been discharging toxic emissions into the local watercourses used for drinking and irrigation.</p>
<p>The mine was operated by a local subsidiary of Vedanta, a huge global mining company headquartered in the UK. And it was the parent company that the claimants sued, and the jurisdiction of the UK courts that they sought. The farmers were represented by a London law firm Leigh Day on a “no win, no fee” basis.</p>
<p>The claimants’ theory was that the UK company had control over the operations of its Zambian subsidiary, as proven by the materials published by the company itself. Pursuing litigation against the subsidiary in Zambia would be ineffective for various reasons, including the subsidiary’s <a href="https://www.bloombergquint.com/markets/zambia-copper-miner-konkola-fights-132-million-electricity-bill">uncertain financial position</a> and the lack of lawyers there experienced in dealing with such a case. </p>
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<a href="https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=362&fit=crop&dpr=1 600w, https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=362&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=362&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=455&fit=crop&dpr=1 754w, https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=455&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/336753/original/file-20200521-102671-lm8njl.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=455&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Satellite view of the Nchanga Copper Mines, alleged source of the pollution. One of the largest open cast mines in the world, this image shows an area roughly 8km across.</span>
<span class="attribution"><a class="source" href="https://www.google.com/maps/search/nchanga+mines/@-12.5114917,27.8409777,7305m/data=!3m1!1e3">Google Maps</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>After nearly four years of litigation, the UK Supreme Court <a href="https://www.theguardian.com/law/2019/apr/10/zambians-can-pursue-mining-pollution-claim-in-english-courts">confirmed</a>: UK parent companies can be held liable in such cases and UK courts have jurisdiction to hear such claims. This allowed the farmers <a href="https://www.bailii.org/ew/cases/EWHC/TCC/2020/749.html">to proceed with their substantive claims</a> heard in the UK.</p>
<h2>Parent companies are being held accountable</h2>
<p>The decision is consistent with a growing trend of holding parent companies accountable for environmental and other harms caused by their foreign subsidiaries. France is one of the most notable examples. The country recently adopted <a href="http://www.respect.international/french-corporate-duty-of-vigilance-law-english-translation/">a special law</a> requiring large French companies to “establish and implement an effective vigilance plan” so as to prevent environmental damage caused by their and their subsidiaries activities, both in France and abroad.</p>
<p>The principle behind the UK decision may allow courts to consider cumulative greenhouse gas emissions from both a parent company and its subsidiaries. Taken separately, emissions from a single subsidiary may easily be considered too insignificant to make any meaningful contribution to climate change and any resulting harms. Yet, suing these subsidiaries alongside their parent companies (especially such fossil fuel giants as BP, whose emissions are considerable on a global scale) could be a more viable option for foreign claimants. </p>
<p>A co-benefit of this is that by demonstrating the presence of UK parent companies abroad through their subsidiaries, foreign claimants may have better chances of persuading UK courts to hear such claims instead of dismissing them for the lack of jurisdiction. This in turn could lead to more effective enforcement of courts’ decisions. </p>
<p>Finally, a somewhat more speculative, yet potentially possible reason for suing parent companies could be related to the recent announcements by some fossil fuel companies, including BP, that they will become <a href="https://www.theguardian.com/environment/ng-interactive/2020/feb/12/bp-statement-on-reaching-net-zero-carbon-emissions-by-2050-what-it-says-and-what-it-means">net-zero</a>. In practice, this could simply mean outsourcing emissions through their multiple foreign subsidiaries. Such a scenario would be quite consistent with claims that BP <a href="https://insideclimatenews.org/news/05122019/lawyers-challenge-bp-over-greenwashing-advertising-campaign">engages in “greenwashing”</a> (a claim the firm “strongly rejects”) and new evidence that it knew about the climate impact of fossil fuels <a href="https://www.ftm.nl/artikelen/bp-video-climate-change-1990-engels?share=xzWZEEUm2lNJ%2BS9iIatM2yMXIzJdbmrxIX9Nwmc6Baw%2BpwhRLCbcjKcAEps6fg%3D%3D">long before it publicly acknowledged the reality of climate change</a>.</p>
<p>It is too early to predict whether such “climate” lawsuits could succeed in the UK, but it may well be that UK courts will soon have to answer this question.</p><img src="https://counter.theconversation.com/content/139007/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sam Varvastian does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How Zambian farmers won the right to pursue claims in UK courts – and why UK polluters should be worriedSam Varvastian, PhD researcher, Cardiff UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/871862017-11-14T19:12:20Z2017-11-14T19:12:20ZTime for a global agreement on minerals to fuel the clean energy transition<p>Representatives from around the world are meeting in <a href="https://cop23.unfccc.int/">Bonn this week</a> to discuss progress towards the goals of the Paris climate agreement. A large part of this challenge involves rapidly scaling up the deployment of renewable energy, while curbing fossil fuel use – but little attention has been paid to the minerals that will be needed to build these technologies.</p>
<p>Wind and solar infrastructure, batteries and electric vehicles all require vast amounts of mined (and recycled) resources. These range from copper for wires and electric motors, to lithium and cobalt for batteries, to smaller amounts of rare metals like indium and gallium for solar cells. </p>
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Read more:
<a href="https://theconversation.com/mining-for-metals-in-societys-waste-43766">Mining for metals in society's waste</a>
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<p>The problem is that the current system for mining these minerals is not always efficient; it’s polluting and is subject to increased social pressure and public protests. Instead, we need a new international mechanism to coordinate global mineral exploration that looks to our future supply needs. </p>
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<a href="https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=335&fit=crop&dpr=1 600w, https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=335&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=335&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=421&fit=crop&dpr=1 754w, https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=421&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/194270/original/file-20171113-27612-wyfz1z.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=421&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">As technology advances, more and different metals are needed.</span>
<span class="attribution"><span class="source">Zepf V, Reller A, Rennie C, Ashfield M & Simmons J, BP (2014): Materials critical to the energy industry.</span></span>
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<h2>Challenges for minerals supply</h2>
<p>While the Paris agreement has created a global framework for managing carbon, nothing similar exists for minerals. This leaves the pursuit of sustainable resource development largely in the hands of mining companies and state-owned enterprises.</p>
<p>Mining these resources generates significant water and air pollution. This problem is increasing: for example, global copper ore quality is <a href="http://www.mdpi.com/2079-9276/5/4/36/htm">declining over time</a>. That means that copper mining now requires excavating twice as much ore as ten years ago to yield the same amount of copper, creating much more mine waste. </p>
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Read more:
<a href="https://theconversation.com/treasure-from-trash-how-mining-waste-can-be-mined-a-second-time-59667">Treasure from trash: how mining waste can be mined a second time</a>
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<p>Lower commodity prices have meant that investment in exploring new mine sites has fallen. But it takes a long time to develop new mines – it can often <a href="rdcu.be/p6U4">take 20 years</a> to go from finding a metal deposit to beginning mining, and only around <a href="http://www.minexconsulting.com/publications/China%20Mining%20-%20R%20Schodde%20Sept%202017.pdf">20% of discoveries since 2000 have led to an operating mine</a>. </p>
<p>Lack of investment in exploration is driven by short-term thinking, rather than a long-term plan to supply rising demand. </p>
<p>In parallel, resistance to mining, often at a local level, is increasing worldwide. Environmental catastrophes, of which there have been <a href="https://theconversation.com/ultimate-responsibility-for-samarco-dam-disaster-will-haunt-bhp-50924">many</a> <a href="https://theconversation.com/weighing-the-impact-of-the-gold-king-mine-spill-and-hundreds-of-inactive-mines-like-it-46662">examples</a>, erode social trust, often delaying or stopping mine development. </p>
<p>A new global mechanism to more effectively plan resource supply could help rebuild trust in local communities, limit price spikes to ensure equitable access to metal resources, and balance the international tension which arises as industries and governments compete for minerals from a shrinking list of countries able to tolerate and profit from sustaining a mining industry.</p>
<h2>A global agreement on mineral resources</h2>
<p>Developing a global mechanism will of course be difficult, requiring substantive dialogue and strong leadership. But there are organisations that could step up, such as the <a href="http://web.unep.org/environmentassembly/">United Nations Environment Assembly</a>, or the newly established <a href="http://igfmining.org/">Intergovernmental Forum on Mining Metals and Sustainable Development</a>. </p>
<p>The global community is well aware of the threat that rising sea levels pose to low-lying countries. We need similar awareness of the crucial role minerals are playing in the energy transition, and the risk that supply problems could derail sustainability goals. </p>
<p>To that end, we need to globally coordinate several crucial aspects of mineral development. To start with, while most detailed information on where minerals are mined and sold is privately held, there is <a href="http://iugs.org/uploads/Consultation%20Paper%202014_Oct_12_AL_EN_DG%20FINAL.pdf">publicly available data</a> that could be used to predict possible imbalances in supply and demand internationally (for example <a href="http://www.sciencedirect.com/science/article/pii/S0921344913002127">copper</a>, <a href="https://link.springer.com/article/10.1007/s11053-014-9256-6">iron</a>, <a href="http://www.mdpi.com/2075-163X/2/1/65">lithium</a>, <a href="http://www.tandfonline.com/doi/abs/10.1179/1743275815Y.0000000007">indium</a>). Publicly-funded institutions have an important role here. They can assess how known supply will meet future demand, and deliver insight into the changing environmental impact. </p>
<p>It should also be entirely possible to develop <a href="http://artsonline.monash.edu.au/wfw/recyclable-resources-atlas/">inventories of recyclable metals</a>, which can be an important supplement to large mining operations. </p>
<p>Compiling inventories of recyclable metals is <a href="http://www.prosumproject.eu/objectives">underway across Europe</a> as part of a move towards a <a href="https://theconversation.com/explainer-what-is-the-circular-economy-23298">circular economy</a> (where as much waste as possible is repurposed).</p>
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Read more:
<a href="https://theconversation.com/explainer-what-is-the-circular-economy-23298">Explainer: what is the circular economy?</a>
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<p>While recycling for for metals like lithium for less than 1%, around <a href="http://www.resourcepanel.org/file/381/download?token=he_rldvr">40% of steel demand</a> is met from scrap recycled during manufacturing and from end-of-life products and infrastructure. Thinking smarter about eventual <a href="http://www.sciencedirect.com/science/article/pii/S0016718517300696">dismantling of buildings</a> at the time when they are built, can support better use of recycled resources. </p>
<p><a href="http://www.ga.gov.au/">Geoscience agencies</a> already offer maps of underground minerals, demonstrating that this kind of co-ordinated perspective is feasible. Extending this approach to recyclables can mitigate environmental impact and ease the social objections to new mines.</p>
<p>A global mechanism for mineral exploration and supply could also be an opportunity to promote best-practice for responsible mining, with a focus on social license and fair and transparent royalty arrangements. </p>
<h2>Overcoming resistance</h2>
<p>It’s a challenging proposition, especially as many countries display less enthusiasm for international agreements. However, it will be increasingly difficult to meet the Paris targets without tackling this problem. </p>
<p>In the decades ahead, our mineral supply will still need to double or <a href="https://www.oxfordmartin.ox.ac.uk/opinion/view/384">triple to meet the demand</a> for electric vehicles and other technologies required by our growing global population. </p>
<p>In short, resource efficiency and jobs of the future depend on an assured mineral supply. This should be a nonpartisan issue, across the global political spectrum.</p>
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<p><em>The authors gratefully acknowledge the contribution of Edmund Nickless, Chair, New Activities Strategic Implementation Committee, International Union of Geological Sciences to this article.</em></p><img src="https://counter.theconversation.com/content/87186/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Damien Giurco received funding in 2017 from the Australian Research Council, CSIRO, Telstra, Stewart Investors, various levels of Australian governments, the International Union of Geological Sciences whose support led to research described in this article. He serves as Editor-in-Chief for the journal Resources and declares no conflict of interest with this article.</span></em></p><p class="fine-print"><em><span>Nicholas Arndt receives funding from the European Knowledge and Innovation Communities raw materials program, serves on committees that prepare or evaluate national or European research programs, and is president of a small company involved in mineral exploration. He declares no conflict of interest in this article</span></em></p><p class="fine-print"><em><span>Saleem H. Ali does research for a variety of public and private organisations but declares no conflict of interest with the content in this article.
</span></em></p>In the decades ahead, our mineral supply will still need to double or triple to meet the demand for electric vehicles and other renewable energy technology.Damien Giurco, Professor of Resource Futures, University of Technology SydneyNicholas Arndt, Professor of Geosciences, Université Grenoble Alpes (UGA)Saleem H. Ali, Distinguished Professor of Energy and the Environment, University of Delaware (USA); Professorial Research Fellow, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/830342017-08-28T20:10:39Z2017-08-28T20:10:39ZThe world protests as Amazon forests are opened to mining<figure><img src="https://images.theconversation.com/files/183567/original/file-20170828-27584-zaks90.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Amazon is the largest rainforest in the world.</span> <span class="attribution"><span class="license">Author provided</span></span></figcaption></figure><p>The Amazon, often described as the “lungs of the Earth”, is the largest rainforest in the world. Its extraordinary biodiversity and sheer scale has made it a globally significant resource in the fight against climate change.</p>
<p>But last week the Brazilian president Michel Temer <a href="https://www.reuters.com/article/us-brazil-mining-idUSKCN1B32A5">removed the protected status of the National Reserve of Copper and Associates</a>, a national reserve larger than Denmark.</p>
<p>The reserve, known as “Renca”, covers 46,000 square kilometres and is thought to contain <a href="http://wwf.panda.org/what_we_do/where_we_work/amazon/amazon_threats/other_threats/amazon_mining/">huge amounts of copper</a>, as well as gold, iron ore and other minerals. Roughly 30% of Renca will now be open to mining exploration. Renca also includes indigenous reserves inhabited by various ethnic communities living in relative isolation.</p>
<p>The decision, which has been denounced by <a href="https://www.japantimes.co.jp/news/2017/08/25/world/science-health-world/decree-opening-brazil-amazon-mining-comes-criticism/#.WaOVupMjHUI">conservation groups and governments around the world</a>, comes as the unpopular Temer struggles with a crushing political and economic crisis that has seen <a href="http://www.reuters.com/article/us-brazil-economy-employment-idUSKBN15F1LE">unemployment rise above 12%</a>. </p>
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Read more:
<a href="https://theconversation.com/with-dilma-rousseff-impeached-brazil-is-set-for-years-of-political-turmoil-57689">With Dilma Rousseff impeached, Brazil is set for years of political turmoil</a>
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<h2>Political and economic turbulence</h2>
<p>Brazil is currently in the middle of the largest corruption scandals in its history. Since 2014, an ongoing federal investigation called <a href="https://www.theguardian.com/world/2017/jun/01/brazil-operation-car-wash-is-this-the-biggest-corruption-scandal-in-history">Operation Car Wash</a> has implicated elite businesspeople and high-ranking politicians, uncovering bribes worth millions of dollars exchanged for deals with the state oil company Petrobas. According to the BBC, almost a third of President Temer’s cabinet is <a href="http://www.bbc.com/news/world-latin-america-39576896">under investigation for alleged corruption</a>. </p>
<p>There is no doubt that Brazil needs to find ways out of recession and unemployment. As the minister of mining and energy has said, “the objective of the measure [to allow mining] is to attract new investments, generating wealth for the country and employment and income for society.” </p>
<p>However it’s not clear that this move will benefit ordinary Brazilians. This is not the first gold rush into this area, and the Amazon still has high indices of poverty and many other challenges.</p>
<p>During the 1980s and 90s tens of thousands of miners flocked to gold deposits in the Amazon, driven by high international prices. One of the most famous examples, “<a href="http://rarehistoricalphotos.com/hell-serra-pelada-1980s/">Serra Pelada</a>,” saw 60,000 men dig a massive crater in the Amazon Basin. </p>
<p>These mining operations typically provided little economic benefits to the local populations. Instead, they attracted thousands of people, which led to <a href="http://projects.aljazeera.com/2015/07/brazil-gold-mine/">deforestation, violent land conflicts</a> and <a href="https://www.ncbi.nlm.nih.gov/pubmed/9600798">mercury pollution in the rivers</a>.</p>
<p>In reality the Amazon and its people deserve a sustainable model of development, which takes advantage of the outstanding biodiversity and beauty of its standing forests. The historical record shows mining is likely to lead to a demographic explosion, and further deforestation, pollution and land conflicts.</p>
<h2>The principle of non-regression</h2>
<p>One important aspect of international environmental law is called the “<a href="https://sapiens.revues.org/1405">principle of non-regression</a>”. The principle states that some legal rules should be non-revokable in the name of the common interest of humankind. Essentially, once a level of protection has been granted there is no coming back. </p>
<p>This principle is reflected in <a href="http://pdba.georgetown.edu/Constitutions/Brazil/brtitle8.html">article 225 of the Brazilian constitution</a>, which lays out the right to a healthy environment:</p>
<blockquote>
<p>All have the right to an ecologically balanced environment […] and both the Government and the community shall have the duty to defend and preserve it for present and future generations.</p>
</blockquote>
<p>The Brazilian constitution also describes the Amazon forest as a “national heritage”. It must then be treated accordingly. </p>
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<strong>
Read more:
<a href="https://theconversation.com/deep-in-the-amazon-jungle-brazils-hidden-cities-are-in-crisis-66712">Deep in the Amazon jungle, Brazil's 'hidden cities' are in crisis</a>
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<p>While the Amazon is a fundamental part of Brazil’s history, it’s also an essential part of the global battle against climate change. The Amazon contains <a href="https://theconversation.com/drying-amazon-threatens-to-increase-carbon-emissions-22822">half the worlds’ tropical rainforests</a>, and its trees absorb and store vast amounts of carbon dioxide. </p>
<p>According to the Intergovernmental Panel on Climate Change, land use, including deforestation and forest degradation, is the <a href="https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data">second-largest source of global emissions after the energy sector</a>. </p>
<p>Developed countries around the world have committed resources to help Brazil offset the costs of safeguarding their forests. One example is the <a href="http://www.amazonfund.gov.br/">Amazon Fund</a>, created in 2008. It has received billions of dollars from foreign governments such as Norway and Germany, to combat deforestation and to promote sustainable practices in the Brazilian Amazon.</p>
<p>But with <a href="http://money.cnn.com/2017/06/01/news/economy/brazil-economy-unemployment/index.html">14 million Brazilians unemployed</a>, further assistance is required to ensure that they can protect their forests.</p>
<p>As well as governments, companies have also committed billions of dollars to fight climate change and support projects that reduce carbon emissions and promote energy efficiency. Most businesses have also created self-regulatory standards to ensure compliance with international laws and ethical standards.</p>
<p>The decision of the Brazilian government leaves us with two questions. How will the international community honour their commitments to keep global warming below 2°C, if countries begin rolling back their environmental protections? And how will companies involved in mining projects in the Amazon honour their social responsibility commitments and moral obligation towards present and future generations?</p>
<p>The degradation of the Amazon will affect the entire world. The clearing of the Amazon for mining will lead to the emissions of thousands of tons of greenhouse gases, furthering global warming and causing the irreversible loss of biodiversity, and water resources, as well as damage to local and indigenous communities.</p>
<p>Let us not take a step back towards more destruction. Rather, let us strengthen the protection of our remaining forests.</p><img src="https://counter.theconversation.com/content/83034/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>I have previously received funding from Swiss Foundations to conduct my Masters, PhD and book publication.
Recently, I received funding from the School of Law, Western Sydney University, to conduct research on illegal logging.
I am a Member of the World Conservation Union (IUCN) Commission on Environmental Law</span></em></p>Last week Brazil opened thousands of kilometres of previously protected Amazon rainforest to mining, in a bid to combat ongoing political and economic disasters.Beatriz Garcia, Lecturer, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/487882015-11-09T03:55:39Z2015-11-09T03:55:39ZWhy dependence on natural resources is bad for the DRC<figure><img src="https://images.theconversation.com/files/100353/original/image-20151030-16519-f7pdbt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Excavators and drillers at work in a copper and cobalt mine near Lubumbashi. Mineral resources are a big part of the DRC's economy. </span> <span class="attribution"><span class="source">Reuters/Jonny Hogg</span></span></figcaption></figure><p>Many African countries have in recent years shown phenomenal economic <a href="http://www.businessinsider.com/world-bank-fast-growing-global-economies-2015-6">growth</a>. But recent developments on global markets – including the drop in prices of commodities such as oil, copper, and cobalt – have <a href="http://www.ft.com/intl/cms/s/3/93d5c572-7bf6-11e5-a1fe-567b37f80b64.html#axzz3q3gZsCWo">raised questions</a> about the sustainability of Africa’s economic growth.</p>
<p>The instability of global market has lowered investors’ confidence, and led to questions being raised about the <a href="http://www.theguardian.com/business/2015/oct/07/risk-global-financial-crash-increased-imf-emerging-economies-eurozone-stability-report">health of the global market</a>. There is a feeling of uncertainty and fears of financial global crises, especially due to a slow down in <a href="http://fortune.com/2015/09/02/china-crisis-us-economy">China’s economy</a>. </p>
<p>The impact of the fall in <a href="http://www.economist.com/blogs/buttonwood/2015/07/commodities">commodity prices</a>, particularly minerals, is being felt in many countries around the world, including the <a href="http://www.aljazeera.com/indepth/opinion/2015/01/africa-oil-shock-economy-20151653236689289.html">Democratic Republic of Congo</a> (DRC). The DRC has been hit by the drop in the <a href="http://www.wsj.com/articles/glencore-shares-fall-on-copper-problems-1442253214">price of copper</a>. <a href="http://www.ft.com/intl/cms/s/0/3f1d9664-562f-11e5-a28b-50226830d644.html#axzz3q3gZsCWo">Glencore</a>, the Anglo-Swiss multinational commodity trading and mining company headquartered in Baar, Switzerland, is <a href="http://www.ft.com/intl/cms/s/0/3f1d9664-562f-11e5-a28b-50226830d644.html#axzz3qKpS0OKa">considering closing</a> some of its operations in Katanga province.</p>
<p>The DRC’s economy is driven by agriculture, mineral resources, manufacturing and services. Over the past decade, the agricultural sector has been <a href="http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Congo%20Democratic%20Republic%20Full%20PDF%20Country%20Note.pdf">declining</a> as the country’s major contributor to its GDP while commodities-related industries have been rising. The mining sector accounts for <a href="http://www.imf.org/external/pubs/ft/scr/2015/cr15280.pdf">one-quarter</a> of the country’s GDP.</p>
<p>Last year the <a href="http://www.africaneconomicoutlook.org/en/country-notes/central-africa/congo-democratic-republic/">economy grew</a> by nearly 9%, driven by the extractive and manufacturing industries, agriculture, commerce and construction, and a high export demand for raw material. Sustaining this growth has now been threatened by the dramatic fall in commodity prices. </p>
<p>In addition, there are fears of increased political instability as President Joseph Kabila is accused of attempting to <a href="http://www.economist.com/news/middle-east-and-africa/21671178-joseph-kabila-may-just-have-acquired-powerful-new-rival-presidents-old-ally-leaves">remain in power</a> beyond his second and last five-year term. </p>
<p>According to the <a href="https://www.imf.org/external/pubs/cat/longres.aspx?sk=43335.0">IMF</a>, the DRC:</p>
<blockquote>
<p>… remains a fragile country with vulnerabilities on the rise. </p>
</blockquote>
<h2>A shaking global economy with local impact</h2>
<p>Closing mines in the Katanga province would have a devastating impact, with severe social and economic consequences.</p>
<p>Thousands of workers and their families depend on the <a href="http://www.radiookapi.net/2015/10/23/actualite/economie/ralentissement-des-activites-de-kcc-la-crise-se-ressent-deja-kolwezi">mining industry</a>. Mine closures would result in a large job losses. The company <a href="http://www.ft.com/cms/s/0/3f1d9664-562f-11e5-a28b-50226830d644.html#axzz3q4L7cA5P">employs</a> an estimated 5000 people in Katanga without counting subcontractors.</p>
<p>New cities and communities have been established and sustained through mining. Small businesses have been created and new forms of commodities trade initiated by people living in the areas surrounding the mines. </p>
<p>The impact of mining houses shrinking their operations could cripple the DRC’s economy which is highly dependent on mineral exports. Up to <a href="http://atlas.media.mit.edu/en/profile/country/cod/">87.2%</a> of the economy is export oriented.</p>
<p>According to the OECD, the DRC’s exports were worth US$7.03 billion in 2013, making it the 103rd-largest exporter in the <a href="http://atlas.media.mit.edu/en/profile/country/cod/">world</a>. Refined copper accounted for one-third of all exports, followed by copper ore (19%), raw copper (7.5%), cobalt (8.8%), cobalt ore (6.9%) and crude petroleum 12%. </p>
<p>The country is therefore extremely vulnerable to commodity prices, or to drops in demand for minerals. The question that needs to be answered is: what should be done to avoid this permanent economic and social vulnerability? </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/100356/original/image-20151030-16542-1vsznxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An employee stands in an open pit at Banro’s Twangiza mine in eastern Congo.</span>
<span class="attribution"><span class="source">Reuters/Tom Kirkwood</span></span>
</figcaption>
</figure>
<h2>Diversification is key</h2>
<p>Many African countries, including the DRC, have for years maximised and concentrated their economic activities, at least at the macro level, in only one sector. </p>
<p>This lack of economic diversity and extreme concentration on one sector has never benefited the continent, and will never benefit the DRC. Diversification is key – not only for GDP, but for local economic development, small businesses and entrepreneurship.</p>
<p>In addition to this, the DRC relies heavily on <a href="http://www.state.gov/e/eb/rls/othr/ics/2011/157260.htm">Foreign Direct Investment</a> (FDI), mainly financial investment, at the expense of local capital investment. The country should not be depending almost exclusively on FDI to run its economy. Rather, local as well as national companies should be allowed to invest in strategic sectors such as farming, agriculture, transport as well as mining.</p>
<p>There are other policies the government could put in place. These include:</p>
<ul>
<li><p>The DRC should encourage and stimulate local investment and support start up businesses. Many of the economic or financial challenges that the DRC has known for many years are linked to economic <a href="http://freepolicybriefs.org/2011/11/21/are-natural-resources-good-or-bad-for-development/">dependency</a>. It is imperative that the government creates a friendly environment for citizens to invest in their communities and get all the necessary support to establish and grow their businesses in a safe economic space.</p></li>
<li><p>The country must accelerate local economic inclusion by taping into the potential of the informal market. A big part of small trades are conducted by women and youth in the <a href="http://www.african-bulletin.com/5920-drc-the-origins-of-the-informal-sector.html">informal sector</a>. These people constitute a class of informal entrepreneurs who, if supported financially and with the necessary skills and logistics, would be able to grow the economy and generate more jobs.</p></li>
<li><p>Strengthen interprovincial economic activities and integration based on small-scale economic activity and trade.</p></li>
<li><p>The role and place of women in local economic development needs to be considered and promoted.</p></li>
</ul>
<p>It is important to mention that many efforts need to be deployed to insure sustainability, growth, and development of the DRC. Political <a href="http://www.theguardian.com/global-development/poverty-matters/2013/sep/20/peace-stability-global-development-agenda">stability and peace</a> are also key for long-lasting economic growth and development.</p><img src="https://counter.theconversation.com/content/48788/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yvan Yenda Ilunga does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The fall in commodity prices has hit the DRC hard. This is a lesson to resources-dependent countries in Africa that they need to diversify their economies.Yvan Yenda Ilunga, PhD Student, The Division of Global Affairs, Rutgers UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/430952015-06-15T04:04:45Z2015-06-15T04:04:45ZCan Zambia escape the clutches of the resource curse?<figure><img src="https://images.theconversation.com/files/84855/original/image-20150612-1461-1b3p3su.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Zambia's success in building its food processing sector depends on tapping into procurement strategies of retail chains such as Shoprite.</span> <span class="attribution"><span class="source">Reuters/Salim Henry</span></span></figcaption></figure><p>Zambia has made slow but <a href="http://www.theigc.org/wp-content/uploads/2015/06/Roberts-et-al-2015-Working-paper.pdf">steady progress</a> in building its industrial capabilities. But a major push is needed if the manufacturing sector is to help lessen the country’s dependence on exports of copper and reduce poverty and unemployment. </p>
<p>This may prove a challenge given that Zambia’s economy has been driven by copper mining. Economies that are dominated by <a href="http://www.economist.com/news/middle-east-and-africa/21638141-africas-growth-being-powered-things-other-commodities-twilight">mineral resources</a> have found it difficult to develop manufacturing. Compounding Zambia’s problem is that it is landlocked, making connections to export markets that much more difficult. </p>
<p>Zambia’s economy grew at an average of 7.76% between 2004 and 2013, faster than the 5% average for sub-Saharan Africa. Despite the high growth rates, the country has not achieved its ambition of diversifying its economy and reducing poverty. </p>
<p>This failure is explained by exports of copper mining having been the biggest driver of the growth.</p>
<h2>Green shoots in manufacturing</h2>
<p>Mining has spurred urbanisation and rising incomes, which have boosted consumption and demand for processed agricultural products. It has also driven the growth of associated industries such as construction, information communication technologies and retail.</p>
<p>Between 2008 and 2013, Zambia’s non-traditional exports grew threefold. A small but growing portion of these represents the growing capabilities and competitiveness of the manufacturing sector.</p>
<p>Most of the non-traditional exports are targeted at southern African markets. Apart from semi-finished copper products, value-added products include cement, animal fodder, milling products, essential oils, and iron and steel products. The number of small and medium-sized firms involved in exporting to the region is also growing. </p>
<p>The manufacturing sector has made a positive contribution to Zambia’s employment and investment. Job creation in the sector has increased fourfold from 55,600 people in 2005 to 216,700 people in 2012. </p>
<p>For this reason, Zambia has prioritised industrial development and has recently approved an industrialisation and job creation strategy paper. </p>
<p>The low-hanging fruits can be found in the <a href="http://www.zda.org.zm/?q=content/manufacturing-sector">agro-processing sector</a>. Food and beverages is the largest component of household consumption in Zambia as well as in the region. </p>
<p>The growth of the urban <a href="http://www.iss.nl/fileadmin/ASSETS/iss/Documents/Conference_presentations/lecture_carlos_lopes.pdf">middle class</a> is driving consumption of processed foods and beverages. Given Zambia’s agricultural <a href="http://documents.worldbank.org/curated/en/2014/06/19712383/promoting-trade-competitiveness-can-zambia">potential</a>, this means the country has substantial opportunities for meeting demand in the region. </p>
<p>But it will only be able to take advantage of these opportunities if it invests in agro-processing. The <a href="http://www.theigc.org/wp-content/uploads/2015/06/Roberts-et-al-2015-Working-paper.pdf">study</a> lists a lack of access to capital as one of the constraints to growth. The government is developing financing options. Among them is an empowerment <a href="http://www.mcti.gov.zm/index.php/about-mcti/statutory-bodies/citizens-economic-empowerment-commission">commission</a> which has developed a mechanism for investing in agro-processing. </p>
<p>There are also increasing levels of foreign and domestic investment in agricultural production – in particular, in <a href="http://documents.worldbank.org/curated/en/2014/06/19712383/promoting-trade-competitiveness-can-zambia">soybean, wheat, poultry and sugar</a> production. And Zambia is already a competitive exporter of vegetables and milling products. </p>
<p>Domestic urban and rural demand for processed foods is increasingly structured around supermarket retail chains. This requires a strategy to implement an effective supplier upgrading programme. Such a programme should take into account the procurement strategies of the retail chains as well as the characteristics of the suppliers. </p>
<h2>Pricing of sugar hampers manufacturing sector</h2>
<p>Zambia could be competitive in the sugar confectionery and other sugar-based products, animal fodder and broiler meat because it offers <a href="http://www.iapri.org.zm/images/WorkingPapers/wp89_revised.pdf">low-cost production</a>. </p>
<p>But charging international prices to the domestic manufacturers hampers the growth of Zambian firms that use these raw materials. </p>
<p>Reducing <a href="http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2014/PDF/Thematic_Edition/Edition_Thematique_EN_web.pdf">transport costs</a> to regional urban centres is also an important hurdle to clear. This could turn Zambia into the regional supply hub for animal fodder. This would enable it to meet a growing demand for inputs into the poultry industry. </p>
<h2>The mining sector as a driver</h2>
<p>The Zambian government’s <a href="http://www.psdzambia.org/uploads/3/0/7/4/3074051/strategy_paper_on_industrialisation_and_job_creation_december_version.pdf">industrial strategy</a> has prioritised engineering products. The <a href="http://mines.org.zm/">mining sector</a> can open up a sizeable market for Zambian manufacturers. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84839/original/image-20150612-1461-10bo0u4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Zambia could become a hub for supplying equipment and other inputs to the Democratic Republic of Congo’s mining sector.</span>
<span class="attribution"><span class="source">Reuters/Jonny Hogg</span></span>
</figcaption>
</figure>
<p><a href="http://www.miningreview.com/zambian-minister-of-mines-calls-on-mines-to-work-with-local-manufacturers/">Local sourcing</a> of equipment and other mining inputs is low. But the market for equipment and other mining inputs in the Democratic Republic of the Congo (DRC) copperbelt potentially enlarges the market that Zambian can use to develop <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/06/25/000333037_20140625150055/Rendered/PDF/888630WP0P13090brief030for0web00610.pdf">economies of scale</a>.</p>
<p>A good example is the re-conditioning of mining equipment. Already, <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/06/25/000333037_20140625150055/Rendered/PDF/888630WP0P13090brief030for0web00610.pdf">re-exports</a> of mining equipment to the DRC figure among Zambia’s top export products. </p>
<h2>Tapping into South Africa’s competences</h2>
<p>In designing its local content policy, Zambia should consider <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/06/25/000333037_20140625150055/Rendered/PDF/888630WP0P13090brief030for0web00610.pdf">co-operation within the region</a>. In particular, it should tap into South Africa’s capabilities and competences as southern Africa’s hub for mining-related capital equipment and services. </p>
<p>The region should also feature in a broader strategy for the <a href="http://www.psdzambia.org/uploads/3/0/7/4/3074051/strategy_paper_on_industrialisation_and_job_creation_december_version.pdf">engineering sector</a> to increase sub-contracting opportunities and relax skills and capital constraints. </p>
<p>To advance its industrialisation agenda, three key issues deserve attention:</p>
<ul>
<li><p>To facilitate entry into mining and retail value chains by domestic firms government needs to improve access to credit. Working with buyers and suppliers it must introduce a national quality assurance system.</p></li>
<li><p>The southern African region has become the largest <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/06/25/000333037_20140625150055/Rendered/PDF/888630WP0P13090brief030for0web00610.pdf">destination</a> for Zambia’s non-traditional exports. Free trade areas under <a href="http://www.comesa.int/">COMESA</a> and <a href="http://www.sadc.int/">SADC</a> are important, but Zambia must focus on regional industrial co-operation programmes that strengthen its position. </p></li>
<li><p>Low levels of competition undermine downstream activities. This is a problem in the cement, sugar, and poultry industries. Industrial policy needs to ensure the competitive supply of raw materials and intermediate inputs to downstream activities. </p></li>
</ul>
<p>Zambia’s industrialisation is increasingly gaining momentum on the back of renewed policy efforts and investment from domestic, regional and global players. In this context, it is particularly important for Zambia to focus on implementation. It must develop effective programmes for upgrading its manufacturing capabilities, adopt a regional perspective and deal with difficult competition issues.</p><img src="https://counter.theconversation.com/content/43095/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Herryman Moono is the National Secretary for the Economics Association of Zambia.</span></em></p>Zambia’s drive to build its industrial capabilities has made steady progress. But it runs up against the history of economies that are dominated by mineral resources and landlocked countries.Herryman Moono, Country (Zambia) Economist and Researcher, International Growth Centre, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.