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.