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30

MINING FOR CLOSURE

vestment subsidy offering for mine developments

made by a host government constitutes a key in-

gredient for such decision making. Thirdly, and

closely related to the point made in Section 1 about

“junior” miners – lax frameworks may attract just

the kind of industrial actors that can be detrimen-

tal to the interests of many national stakeholders

– that is, miners that do not pursue environmental

and social performance seriously.

The third area introduced, requires that the effect

upon the rents available to government must be con-

sidered. Perceptions may exist that investment in

Mining for Closure

will reduce the economic benefit

that can be obtained from a mineral resource. While

this might be a feasible scenario in the short term, it

appears reasonable to immediately refute this when

consideration of the mine-life is taken into account.

While it is clear that there are costs involved in the

conduct of best environmental and social practice,

it is the role of government to ensure an optimum

yield frommining in the medium to long-term. The

accrual of environmental and social externalities

in order to provide short-term internal gain hardly

appears to be an optimal approach. Further, and as

discussed in Sections 2.1 and 2.2, the ongoing con-

duct of

Mining for Closure

by miners – while they are

mining, represents an efficient, if not the optimal,

economic outcome. That is the investment to pre-

venting external costs ex ante is significantly less

than the costs associated with making good environ-

mental and/or social damage

ex post

.

The final point addressed here is related to corrup-

tion – in particular where individuals or authorities

in positions of power or responsibility, seek per-

sonal benefit from mining activities and/or seek to

oppose the implementation of

Mining for Closure

principles for the reason that the monies available

for diversion for personal gain are reduced. In juris-

dictions where good governance and the rule of law

have not been established, it is feasible that such

actors may be able to act in this manner. Indeed,

Stephen Stec (personal communication: Regional

Environmental Center for Central and Eastern Eu-

rope, 2005, 7 July) argues that in certain economies

and especially transitional ones, the problem of

underpaid and therefore corruptible officials is en-

demic and has an influence on decision-making re-

lated to mining. According to Stec, the large sums

of money in mining, combined with authorities in

a position to approve or influence mining projects

that are not always motivated by the public interest

alone, is a serious problem.

59

Such factors however, should be seen as socio-po-

litical aberrations, and not an argument against

Mining for Closure

. The rule of law as evidenced in

measures such as the control of corruption, respect

for property rights, the elimination of bribery, and

the transparent distribution of revenues have been

clearly linked to the economic success of mining

nations (Andrews, 2002).

59. As such, unclear legal regimes are recognised to add uncer-

tainty with respect to many aspects of

“Mining for Closure”

includ-

ing in particular financial assurance requirements. Special meas-

ures must be taken to ensure that financial assurance on paper is

financial assurance in reality – especially where institutions and

legal frameworks are less secure.