The World Bank notes that mining projects, when well-managed, offer an opportunity to transform resource wealth into sustainable development in many poor countries. Its Mining Investment and Governance Review (MInGov) analyses the sector and its context to facilitate work on mining regulation, governance and investment.
The new MInGov tool measures governance in mining countries and provides an assessment of key factors that facilitate successful investments and sustainable development.
- The importance of governance in a competitive investment climate
- Aspects of governance from different stakeholder perspectives
- The opportunity to focus on governance in the down-cycle.
Mining makes up a substantial part of the economies of many developing countries and has the potential to deliver significant development benefits when managed in a holistic, sustainable manner. Responsible mining can lift people out of poverty by offering economic opportunity, jobs and training. It generates tax revenues that governments can spend on services like health and education. The infrastructure built for it can be shared with local communities to supply electricity and water.
To maximise benefits to the poor, mining must be properly regulated every step of the way, from discovering minerals in the ground, to extracting them and transforming them into sustainable development. Each step, from conducting geological surveys to managing export tariffs, faces different regulatory challenges. Shortcomings in any of these stages can have severe repercussions.
Governance of the mining sector has a direct impact on investment in resource-rich countries. Investors monitor the sector’s governance in each country, and reward better performance with a lower cost of capital. Through the collection and analysis of a unique and comprehensive dataset, MInGov presents an objective assessment of the mining sector of several countries. It offers actionable avenues for reform, supports transparency, and informs investment decision-making and debate among interested stakeholders.
MInGov gives government and regional public organisations access to policy and institutional analyses that affect the sustainable development of the mining sector, including its investment climate, effectiveness of public institutions in developing and monitoring the sector, as well as the costs and benefits to stakeholders.
Investors, mining companies and other companies in the sector benefit from access to country-specific, relevant governance data, policies and practices of governments that affect investment risk and decision-making in the sector.
MInGov provides civil society organisations, local communities, academia, development partners and sector monitoring organizations concise, high-quality information on government, mining, and investor concerns and performance. They also get access to a comprehensive overview of the operating climate and the incentive structure of the sector to inform their participation in mining sector-related discussions.
MInGov stakeholders include national and sub-national governments, mining companies and other firms along the mining value chain such as suppliers and logistics firms, financial institutions, mining-affected communities and civil society organizations. Regional development organizations such as the African, Asian and Inter-American Development Banks or the African Minerals Development Centre, sector monitoring organisations like the Extractive Industries Transparency Initiative, donors, academia and research groups could also benefit from this review.
By June 2016, MInGov will have completed and published assessments of nine countries using a consistent, measurable, comparable and actionable methodology. These country assessments will include seven in Africa, one in Latin America and one in Asia. A business and an institutional structure for the long-term development of MInGov, including funding options for the continuation in 2016 and beyond are expected to be in place at that time.
