Mining's contribution to poverty alleviation and infrastructure, through partnerships

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Diane Tang-Lee
Senior Programme Officer

Mining doesn’t generally leap to mind in the context of sustainable development. However, given the magnitude of mining in many lower-income countries, mining can and should play a role in broader economic and social development, as well as environmental stewardship. Recognising this important role, International Council on Mining and Metals (ICMM) was formed in 2001 to strengthen the environmental and social performance of the mining industry.

Mining’s contribution to poverty alleviation (SDG 1)

One of the roles that the mining industry can play is in its economic contribution and the potential to alleviate poverty through employment. Employment reduces poverty, boosts living standards, raises productivity and allows individuals to invest in themselves and their families – improving health, education and future economic prospects.

The mining sector generates employment directly by hiring people to work on mining projects (including long-term contractors) and indirectly through the supply chain. For every mining job created a further 5-15 are generated in the rest of the economy through local purchasing, wages payments, taxation and increased business activity. ICMM’s report Role of mining in national economies (Romine) shows that, in terms of the allocation of a mining project’s revenue, salaries and wages typically represent 10–20 per cent.

But the further potential to create local economic opportunities lies in the fact that most of the project revenue (50–65 per cent) goes towards operating and capital expenditures: expenditures that can create additional indirect employment in areas such as energy, water, food, etc.

To help mining companies maximise their potential in creating broader economic opportunities, ICMM published the Mining: partnerships for development toolkit. This toolkit provides a methodology for evaluating the positive and negative economic and social effects of mining. It supports mining companies and other stakeholders in developing an improved understanding of what issues or policies may be helping or preventing host communities from benefiting more fully from mining. Relevant to SDG 17, ICMM member companies have also committed to actively support or help develop partnerships with other stakeholder groups with the aim of enhancing the social and economic contribution of mining.

Mining’s contribution to infrastructure (SDG 9)

Another area where mining companies have the potential to play a key role is in supporting SDG 9. Member companies of ICMM have invested in infrastructure, including roads, railways, and water infrastructure. A good example of this is the mutually beneficial waste water treatment plant that Freeport’s Cerro Verde mine built within the mine concession in Peru. Investments such as this benefit both mining and the wider community.

ICMM supports its members in using water in ways that are socially equitable and environmentally sustainable. ICMM launched its Water stewardship framework in 2014 to promote a common understanding of water challenges throughout the mining industry, and to present ways that they can be addressed. Acknowledging that water is a critical resource for all, the framework encourages member companies to thoroughly understand the water needs and behaviours of local communities, ecosystems, and other industries across the area of water in question. ICMM members are then encouraged to create a water management strategy that increase efficiencies. One such example is creating opportunities for shared use water infrastructure. Members’ commitment to equitable water stewardship was enhanced in January 2017 with the adoption of a Water stewardship Position Statement into ICMM’s Sustainable Development Framework.

Mining’s contribution through partnerships (SDG 17)

ICMM advances its 10 principles, which are closely linked to the SDGs, by partnering with a variety of international organisations. ICMM partners with WWF for example, to ensure that the industry’s approach to water stewardship is robust and appropriate. Over the years, ICMM has also signed MoUs with International Union for Conservation of Nature (IUCN), out of a recognition that we share objectives in the areas of conservation and sustainable development. Lastly, ICMM is the second-largest funder of the Extractive Industries Transparency Initiative (EITI); together, ICMM and EITI seek to improve governance in resource-rich countries.

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In promoting and demonstrating best practice in industry-wide performance, and bringing evidence-based perspectives and thought leadership to policy development, ICMM is working with the mining industry and stakeholders to support the realisation of the SDGs.