Edited by Terry O’Callaghan and Geordan Graetz
My first impression from looking at the author list of this book was that it was very academic, and I thought ‘where are the contributions from real-world mining engineers, geotechnical engineers, geologists and metallurgists?’ However, I found the majority of the book a decent compilation of well-referenced research, and below I give a brief account of the sections that particularly piqued my interest.
The book starts with a candid account of the impacts of the Samarco disaster in Brazil, discussing social activism and the impact this is having on the strategies of energy and resources companies.
Chapter 2 talks about foreign direct investment (FDI), why mining is different to other industries and what sources of information are relied upon for FDI decisions. The importance of security of tenure is highlighted, but there is no reference to the JORC code. The omnipresent problem of regulatory overlap, duplication and capture is documented. There is also a timely discussion of taxes and royalties, which taps into recent developments in the Asia-Pacific (APAC) to increase rents from the sector.
Chapter 3 goes into detail on the complexity of divergent and convoluted regulatory regimes across the APAC, and discusses country performance in terms of the Corruption Perception Index (CPI). Considering the failure of the harmonisation of the Australian mines safety legislation, statements such as ‘national governments should formulate consistent standards and regulation and insist on consistent implementation and monitoring’ do not address the fact that laws are passed (or not) by parliamentary politicians at the state and federal level – it’s not a rational process.
Chapters 4 and 5 discuss property, politics and power, and social risk and business risks in mining. It reminds me of the Minerals Council of Australia and the Chamber of Minerals and Energy of Western Australia’s impact on the failed recent attempts by federal and state governments to introduce the minerals resource rent tax and increased gold royalties.
Chapter 6 discusses security of resource supply and the growth in resource nationalism in the APAC. The discussion ties in to previous chapters, in that if resources companies don’t appear to be looking after the interests of their host countries, the host countries will act to defend their interests.
Chapter 20 looks at legacy issues and abandoned mines. It highlights that both industry and government have failed to address the issue of mine closure and abandoned mines effectively, leaving the tax payer with the liabilities and local communities unprotected from the implications of polluted water, mercury contamination, acid mine drainage, etc.
Some of the recommendations provided may be impractical, such as requiring companies to provide water management and tailings storage facility (TSF) closure on mine leases ‘in perpetuity’ – companies usually have a limited lifespan and will run out of cash without revenue-generating activities. Mining leases will often be revisited for the same commodity or for different commodities over time by different mining companies, and full rehabilitation of each visit may not be practical. Including the cost of full rehabilitation from the start of a project will probably ‘kill’ the investment and the full life-of-mine plan is rarely developed in totality from the start. Most mines have a rolling three years of reserves, as that is all most mining companies can afford for exploration drilling and feasibility studies, which are funded by the operational cash flow. The recommendations in this chapter are well intended but they unfortunately may not be practical in the real, cash-constrained world. It is clear that the important issue of safe and sustainable closure needs ongoing consideration to ensure the best outcomes for communities.