Many countries view the mining sector as a key engine of economic development. Ample evidence exists that countries that adopt modern mining legislation and offer an enabling environment can attract private sector investment in mining exploration and production. This, in turn, contributes to increased tax revenues, export earnings, employment opportunities, infrastructure development especially in rural areas, and transfer of technology to the host countries. However, while the extraction of mineral resources provides developing countries with considerable opportunities for economic development, there is the risk that mining operations can turn into socio-economic enclaves or cause environmental damage. Attention to social and environmental considerations and government commitment to good governance and transparency is important. Countries, communities, and companies face tough questions about opportunities and risks as they develop steps to ensure responsible approaches toward mineral resource development.
In response to this challenge, the World Bank’s approach to mining sector reform has evolved substantially over the last 20 years. In the early years, the emphasis was on reforming policies, legislation, and mining sector institutions to increase private investment and related economic performance. By the mid-1990s, the need to improve environmental performance of the sector became an essential part of the reform effort. Since then, where necessary, any technical assistance to the mining sector has included revisions to laws and regulations to ensure that environmental provisions are adequately covered.
Over the past decade, community and regional development issues have entered into the dialogue and assistance, including the impacts on women and other frequently disadvantaged groups. In some countries, the proper collection, management and deployment of the sector’s fiscal revenues are the main factors driving development, while in others, the development strategy may put more focus on mining sector itself as the catalyst for industrialization. The World Bank’s support to the mining sector has moved along these stages over time, and provides a more comprehensive approach by addressing all these steps of mining sector development.
The World Bank’s mining sector reforms emphasize policies and programs that increase the value added by the mining sector, both at the community level for individual mines and at the regional or national level for the sector as a whole. The former focuses on the development of human and institutional capacities in host communities to take advantage of the new business opportunities afforded by a mine. The latter sees the mining industry as the first part of an integrated development platform with shared infrastructure, a mining industrial cluster, and subsequently the development of other industrial activities or clusters.
While the bulk of the World Bank-supported work on mining sector reform has concerned medium- and large-scale investments, efforts have also been made with respect to artisanal and small-scale mining. The focus of World Bank support for artisanal mining has been to formalize the sector and in particular to improve livelihoods and enhance its productivity and environmental performance. Key to supporting these goals is the need to eliminate the trade of conflict minerals. In this respect, the World Bank is working with governments, industry, communities and civil society to support certification schemes and ensure that these take into consideration the possible implications on artisanal miners.