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ICMM: 'resource curse' not so simple

The International Council on Mining and Metals says the existence of the resource curse is up for debate in a new study.
ICMM: 'resource curse' not so simple ICMM: 'resource curse' not so simple ICMM: 'resource curse' not so simple ICMM: 'resource curse' not so simple ICMM: 'resource curse' not so simple

Principles panel: NRGI's Audrey Gaughran, ICMM's Aidan Davy, the World Bank's Sheila Khama and Oxfam's Maria Lya Ramos. PICTURE: ICMM

People in mining-dominated countries might have better lights, roads and water, but they don't have major advantages in health, equality or access to food, the ICMM says in its 'Social Progress in Mining Dependent Countries' report

But the ICMM's work does find people in mining-dependent countries did better on the whole than those in countries with more varied economies between 1995 and 2015.

According to the industry body's new report, people in mining-dependent countries are more likely to be above the international poverty line and have access to better infrastructure and energy than those in non-mining-dependent countries.

Using metrics from institutions such as the World Bank, the industry body said after looking at 11 United Nations Sustainable Development Goals, people in countries such as Botswana and Chile had seen a 78% improvement on average compared to 71% in non-mining countries.

In its simplest form, the resource curse theory is that countries with major natural resources will have poorer economic performance in the long run than those that don't, because of the focus on one revenue stream. 

But those in countries where mining played a big part in the economy were also more likely to have seen less progress in ‘good health and wellbeing' (90% improvement against 96%), ‘zero hunger', and held little advantage in reducing inequality (74% against 73%) and gender inequality (70% and 69%).

ICMM COO Aidan Davy said the question the council tackled was whether "an abundance of mineral resources can hinder or enhance" countries' development.

"Overall we see that progress is strong [in mining-dependent countries], compared to either hydrocarbon-dependent countries or non-resource dependent countries," he said.

"They improved across a larger number of social metrics than either of those two categories."

The answer comes with the caveat the research couldn't prove mining was the defining factor in the improvements in the 25 countries studied that were mining-dependent or mining- and oil-dependent.

Oxfam America ‎extractive industries programme manager Maria Lya Ramos said the mining world still had plenty to work on.

"It goes without saying harm caused in one area cannot be offset by a social project elsewhere," she said. 

"We can't just consider for example industry efforts to combat malaria or infant mortality because the sector is also very much also creating public health crises that are putting tremendous strain on public health sectors in countries."

Ramos used the example of Glencore's Antapaccay copper mine in Peru's Espinar region.

"Since the early 2000s [locals] have been complaining about contamination of the soil, water and air," she said.

"There have been a series of steps to show people have extremely high levels of heavy metals [such as] cadmium, lead, mercury, arsenic.

"There have been a series of dialogue tables bringing the company, government [and] communities to a round table. There have been a series of action plans formulated with local government and regional government, but no action."

Glencore says the heavy metals occur naturally in the region and has also put money into the local water treatment plant.

The ICMM study did not go down to the town or village level, but looked at regional impacts in Ghana, Peru, Chile and Indonesia, and not surprisingly found a mix of answers. 

"Absolute regional progress differs by country: in Peru and Ghana, the socio-economic performance of mining-dependent regions outstripped that of non-mining regions. The opposite was true in Indonesia and Chile," the report said. 

It also said governance was not a strong suit for mining-dependent countries between 1995 and 2015.

"Only 52% of MDCs improved anti-corruption measures [in that time]; the average score of MDCs on the World Governance Indicators corruption control index even declined slightly from -0.31 to -0.32 over the 20-year period, signalling efforts to fight corruption have slowed in many mining-dependent countries," the report said.