Shared-use mining infrastructure: why it matters, and how to achieve it
This new Blavatnik School Working Paper addresses an issue which is vital for the future economic development of many countries in Sub-Saharan Africa: making the right choices about the terms on which the infrastructure needed for the effective exploitation of natural resource wealth is managed. With many bulk mineral deposits located in remote and poorly-explored regions, this infrastructure (particularly rail and port) is critically important for host governments, enabling them to maximise resource rents and achieve wider economic development.
In Sub-Saharan Africa, large greenfield mines have historically been developed as ‘integrated’ projects in which both mining and infrastructure operations remain under the exclusive and largely unrestricted control of a 'first mover' mining firm. The authors consider the implications of this model, and examine the cases for and against imposing ‘open access’ regulation on bulk mining infrastructure.
The paper concludes that host governments should, in almost all cases, impose regulation requiring open access to such infrastructure, as opposed to letting the mining company operate the infrastructure in its own interest. It also stresses that such regulation must be both effective and workable, and that the need for greater expertise and capacity in this area should not be underestimated.
Co-author Glen Ireland is presenting the paper at the World Bank, and Professor Sir Paul Collier will be joining him at the Mining Indaba conference in Cape Town, South Africa (8-11 February 2016), where governments, experts and companies come together to discuss current issues in mining development activities.