The International Council on Mining and Metals (ICMM) has welcomed the G8’s call for greater transparency and notes the G8’s recognition of the our sector’s potential to contribute to economic growth and poverty alleviation. The statement released by G8 on June 7 gives endorsement to current efforts within the extractives sector to encourage greater transparency and accountability, stating that raw materials produced by the sector are a “particularly valuable asset for sustaining growth and reducing poverty in the poorest countries”.

In a bullish mining and minerals sector whose market capitalization has increased from $389 billion in 2003 to $1 trillion at the end of 2006, ICMM recognizes that the industry can make a significant contribution to economic development and poverty reduction, particularly in emerging economies. The leading mining and metals companies represented by ICMM believe that such outcomes depend on actions by all stakeholders (companies, governments, communities, NGOs, and international agencies included).

ICMM President Paul Mitchell says “I believe we are now reaching the limits of what companies working alone can do to tackle the economic, social and environmental impacts of mining. Companies can fund all the community projects they like, they can hire and train hundreds of local people, but these economic effects are usually dwarfed by the tax revenues raised from mines. To achieve broader benefits, co-operative infrastructure, employment and other programs are needed.”

ICMM has undertaken a ground-breaking three-year research project in partnership with the World Bank and UNCTAD which has found that mining has significant potential to drive economic growth and poverty reduction in mineral-rich states under certain conditions. The research found that particularly for the poorest countries, mining can provide opportunities for early-stage development that other industries do not offer.

In Chile, Ghana and Botswana, for example, since the early 1990s increasing mining investment has coincided with an upturn in economic growth. As a result, poverty has fallen nationally (by 40%, 14% and 20% respectively) and more so in regions with a high level of mining activity. The challenge is to ensure such benefits are achieved more consistently.

ICMM President Paul Mitchell says, “Ultimately the long-term interests of society will be served if mining contributes to achieving – and is seen to achieve – significant reductions in poverty and sustained economic growth across the developing world.”

This goal can only be achieved with proper transparency and accountability in the sector. ICMM is pleased to note that the G8 statement endorses the Extractive Industries Transparency Initiative (EITI), which advocates full disclosure of company payments and government revenues from mining in participating countries, and the Global Reporting Initiative (GRI) framework.

ICMM partnered in the development of the Mining and Minerals Sector Supplement to the GRI framework. ICMM member companies are already using GRI-based reporting indicators, and have committed to an additional element of independent third-party assurance of public reporting. ICMM is also an active supporter of EITI.