Mining Investment Research Articles

A new mineral policy development framework for Pakistan

PurposeThe purpose of this paper is to develop a mineral policy development framework for Pakistan based on seven key elements derived from the gap analysis of Pakistan’s current framework with leading developing minerals-based economies. Pakistan is gifted with significant mineral resources that have the potential to lift its economy and bring prosperity to its citizens. For this to happen, Pakistan must formulate a mineral policy based on leading practices to attract mining investment for economic growth.Design/methodology/approachThis paper develops a new mineral policy framework from the lessons derived from the gap analysis conducted in the first paper of this research. These lessons are called the “elements of development” which, after evaluation with the existing framework, will provide the suggested strategic fit measures for the formulation of the new mineral policy framework for Pakistan.FindingsA new mineral policy framework is proposed based on seven key enablers, namely, institutional framework, stable political economy, legal framework, regulatory framework, fiscal framework, stakeholder participation and sustainable development. A new organisational structure of the Ministry is also proposed based on the generally accepted organisational structure of tiers, implementation and regulatory bodies.Practical implicationsThe key constraints for Pakistan’s mineral sector are as follows: the sector is lacking an enabling institutional framework for efficient access to mineral resources and lacks an enabling fiscal and regulatory framework including secure mineral rights system for mining to enhance the economic attractiveness of the sector.Originality/valueThis paper presents original work on the development of a new mineral policy framework for Pakistan to extract maximum benefit from its mineral resources.

La minería y el desarrollo insostenible. El estudio de caso en San Juan, Argentina

<p>“La minería es el motor principal del desarrollo”, reza uno de los principales argumentos a favor de esta actividad. Este trabajo es producto de una investigación de tipo interpretativo y comprensivo, que aspira a verificar el slogan mencionado, tomando como caso la minería extractiva en San Juan, provincia ubicada en el centro-oeste de Argentina. Entre los principales resultados obtenidos está que la alta inversión extranjera en minería no es sinónimo de desarrollo, sino por el contrario, genera un crecimiento concentrado, excluyente e insostenible, vulnerando el aparato comercial externo, desplazando las producciones tradicionales y generando un proceso de conflictos socioambientales y de daños ecológicos irreversibles.</p>

Use of Selected Derivatives For Valuation of Mining Investment Projects

The article is devoted to the issue of valuation of mining investment projects (with the use of the Monte Carlo method) via selected derivatives. The purpose of using such instruments in the process of valuation is to secure the revenue of a mining company by guaranteeing raw material prices. According to the authors of the publication, the use of such instruments will help reduce the variability of obtained results and increase their reliability. The article consists of four parts. The introduction to the article specifies the purpose of the work. The second part of the article presents the foundations for the analysis, the purpose of which is to compare the obtained results ofthe investment value for three variants. The first one assumes the use of financial options to secure raw material prices, the second assumes the use of futures, and the last one stipulates that the company does not take action with respect to securing raw material prices. The third part presents the results of the study. Due to the availability of data, sample calculations were carried out on the basis of the financial information published by a copper manufacturer. The obtained results show that from the point of view of the value of the investment and the risk of negative investment value, the most advantageous method is to secure the prices of raw materials in the process of valuation of mining investment projects with the use of options. The last part of the work is a summary presenting the conclusions of the analysis. The article is accompanied by a list of literature used to prepare this study.

Application of Real Options on the Decision-Making of Mining Investment Projects Using the System Dynamics Method

Estimating the valuation of mining projects has great significance for investment decision-making. Since the existing valuation methods are not appropriate for mining projects affected by various uncertainties over the long term, this paper presents a hybrid investment evaluation model that is based on real options and system dynamics for mining projects. To address uncertainties and managerial flexibilities that are contained in mining projects, the model integrates the static net present value calculated by traditional discount cash flows and the real options value generated by the Black-Scholes model into the total value of mining projects. Subsequently, the model applies system dynamics modeling to analyze the dynamics of the complicated mining operation system, quantify its variables and interactions, and estimate its volatility, which enables a more accurate real options valuation. A realistic case of the Hongwei uranium deposit in China is the basis for the presented numerical illustration of the model. The findings indicate that investors are prone to losing an opportunity to invest if they only rely on traditional discount cash flows' methods, because the value of the project calculated by discount cash flows is -175.59 million yuan that under zero. However, the results obtained from the method proposed in this paper suggest that the project has a value of 327.65 million yuan.

Resource Booms and Institutional Pathways: The Case of the Extractive Industry in Peru ed. by Eduardo Dargent et al.

Reviewed by: Resource Booms and Institutional Pathways: The Case of the Extractive Industry in Peru ed. by Eduardo Dargent et al. Anthony Bebbington Eduardo Dargent, José Carlos Orihuela, Maritza Paredes, and María Eugenia Ulfe, eds. Resource Booms and Institutional Pathways: The Case of the Extractive Industry in Peru. Cham: Palgrave Macmillan, 2017. 206 pp. $89.99 e-book (ISBN: 978-3-319-53532-6); $119.99 cloth (ISBN: 978-3-319-53531-9). Though formally an edited collection, Resource Booms and Institutional Pathways is the product of a collective intellectual endeavor linking scholars and (former) students at the Pontificia Universidad Católica del Perú. La Católica has become one of the most interesting centers of interdisciplinary research on extractivism in Latin America, and this book reflects the combination of innovative thinking, empirical sensibilities and merging of theory and political insight that has underlain so many of the contributions that have emerged from the university. That this work has been done at La Católica itself reflects the degree to which Peru was one of the "leaders" in the mineral investment boom that has come to affect so much of Latin America over the last two decades. This book takes that boom as its period of analysis, and asks how sustained investment in the "new" mining has interacted with patterns of institutional change in the public sector. In pursuing this question, the book speaks directly to theories of institutional change that, while drawn primarily from political science and sociology (Kathleen Thelen, Peter Hall, Doug McAdam, Peter Haas etc.), have much relevance for geographers who are interested in state building, environmental governance, contentious politics, and uneven development. As they analyze patterns of institutional change over the last two decades, the authors prefer to talk of "institutional regime" rather than simply of "institutions" understood as "the rules of the game." This is because, they argue, "[l]aws only become institutions in the proper sense of the scholarly definition, when state actors and/or social forces put their power and weight behind them" (p. 178–9). Rule enforcement is, then, every bit as important as rule-making, and such enforcement depends on the relative capacities of state, civic, and private sector organizations to roll out or resist changes in the rules that govern the mineral sector. The notion of "institutional regime" is intended to capture this combination of rules and organizational capacities. The authors make a useful distinction between institutional regimes related to "benefits management" and "costs management" linked to extractives. They focus their analysis on those regimes for "benefits management" that involve the collection, redistribution and spending of taxes generated by resource extraction, as well as the more specific case of fiscal transfers for investment in provincial universities in areas with the presence of tax-paying resource extraction. On the "costs management side" they consider institutional regimes linked to environmental regulation, conflict management, and community consultations (though consultation is also seen as part of benefits management). The individual chapters are a very good read. While they probably speak more to Peruvianists than to anyone else, they include [End Page 233] much that is of relevance for ongoing challenges and contention in the region as a whole. Thus, while grounded in the Peruvian experience, the chapters throw important light on how Ministries of Environment have been created and resisted; environmental regulations governing mining can be tightened, contested, and unraveled; fiscal systems that transfer substantial parts of extractive industry tax payments back to mining regions can emerge and then become self-reproducing in ways that constrain further innovation in fiscal practice; and human rights agencies within the state can be strengthened and become important sources of transparency, accountability and public debate over extractivism. These are vital insights for scholars and activists alike who share an interest in the conditions under which "better government" might emerge. And for those who need inspiration, the chapter on the Defensoria del Pueblo should do the job: against the odds, this is an institution that has made a profound difference to the regulation of extraction and extractive industry conflicts in Peru, and the analysis throws light on how that became possible, albeit with avances y retrocesos. For...

Knowledge Politics in Environmental Conflicts: A Case from Brazil

Following large environmental conflicts and disasters, economic endeavors -particular large-scale investments in mining or hydropower- are nowadays subjected to rigorous environmental law and regulations. The application of rules and regulations takes place in environmental administration and courts and includes environmental impact assessments (EIAs, and does not correspond to the identical English acronym), licensing processes and litigation in court. Within these contexts, decision making is supposed to be based on rational reasoning and purportedly impartial scientific knowledge and information. Thus, citizens’ rights in resource conflicts and the effective enforcement of these rights in administrative, judicial, and political contestation become highly dependent on knowledge and information and the ways it is produced, interpreted, and valued in the interaction between people affected and investors, lays and experts, bureaucrats, legal practitioners and citizens. Political contestation becomes seemingly a technical dispute. This paper bases on a qualitative study of the conflicts surrounding the establishment of the large-scale iron-ore mining project Minas-Rio, in Conceição do Mato Dentro, Minas Gerais, Brazil, conducted in 2014-2015. It describes the problematic nature of the production of information and knowledge in a given political-economic context and the contestations surrounding the validity of apparently scientific results as they emerged alongside the environmental licensing process. Environmental studies and their technical evaluations are based on questionable assumptions and often lack accurate baseline data. The deficiency of public resources for independent investigation makes the environmental agencies dependent on services and information provided by mining companies. Apart from this form of collaboration, the prioritization of allegedly scientific “expert” knowledge, career trajectories of agencies’ personnel, and pressure by pro-mining politicians leads to the uncritical adoption of data, information and knowledge provided by the company and/or the consultancy firms employed by them. At the same time, information given by the people affected and environmentalists becomes sidelined. Thereby, the basic environmental and citizen rights, as the rights to information concerning the environment and to participation in licensing processes, guaranteed in the Brazilian constitution and environmental legislation, become ineffective.

Importancia de la mineria y la agricultura en la economía peruana

This article presents the contribution of the mining, agricultural and other sectors to the Peruvian economy. It describes the performance of the mining and agricultural sectors during the last two decades, using macroeconomic indicators; In addition, it describes how in this period the Peruvian economy shows an impressive growth of 5.4% in terms of gross domestic product (GDP); This period is also known as the "mining boom". The excellent performance of mining and agriculture sectors contributed to this economic performance. However, despite the economic growth and changes during the last two decades, extreme poverty, malnutrition and childhood anemia are still a serious problem. To eliminate the extreme poverty Peru has to grow at least 6% per year in terms of GDP. This study proposes that mining and agriculture should continue to grow, as well as the other sectors to ensure Peruvian development. The recent recovery of the Peruvian economy is due to the latest mining investments and the interest of the current government in the promotion of private investments.

Protection of Community Economic Rights in Mining Areas in North Sulawesi

Economic inequality of people in the mining area because mining investment activities are not beneficial in improving the welfare of the community. This is a serious problem that causes the occurrence of resistance and mining investment conflicts between investors and the surrounding community. The resistance was caused because the community was not involved in contracts made by mining companies with the local government. The community is always suspicious of contracts made related to mining exploration by foreign parties. The economic rights of the people in the mining area are not contradictory to the principles in Article 33 of the Constitution of 1945. The purpose of this study is to find a model for regulating the economic rights of communities in the mining area and a model of resistance prevention in the implementation of mining investment in North Sulawesi. By using a normative legal research method that is comprehensive both studies on aspects of the aspects of regulation and application in the field. With the use of this method, it is hoped that an appropriate formula will be found in addressing the continued occurrence of resistance in the form of community resistance to mining investment in North Sulawesi. Keywords: protection, community economic rights, resistance, mining

The ‘Exploring For The Future’ Groundwater Programme: A Multi-Physics, Inter-Disciplinary Systems Approach For De-Risking Investment in Agriculture in Northern Australia

The Australian Government has recently provided Aus$100.5M to Geoscience Australia over 4 years (2016-2020) to manage the Exploring for the Future (EFTF) programme designed to increase investment in minerals, energy and groundwater resources, primarily in Northern Australia. The programme includes Aus$30.8M for groundwater-specific investigations, recognizing that there are major gaps in our knowledge of Northern Australia’s groundwater systems and resources. The groundwater component of the EFTF programme is focused on addressing these knowledge gaps, with the aim of underpinning future opportunities for irrigated agriculture, mineral and energy development, and community water supply. The groundwater programme will include identification and assessment of potential groundwater resources and water banking options in priority regional areas, while also analyzing the salinity risk (including seawater intrusion). To rapidly map, characterise and assess regional groundwater systems and resources in the data-poor ‘frontier’ areas of Northern Australia, a multi-physics, inter-disciplinary approach has been developed. The programme involves the initial use of temporal remote sensing ‘data cube’ technologies for surface hydrology and landscape mapping, and acquisition of airborne electromagnetic (AEM) and Ground Magnetic Resonance (GMR) datasets. This provides a framework for targeted investigations including passive seismic, microgravity and GPR; borehole geophysics (Induction, gamma and Nuclear Magnetic Resonance (NMR)); drilling and pump testing; hydrochemistry and geochronology (water, landscapes and geology); as well as soils, regolith and basin/bedrock geological, hydrogeological and structural mapping and modelling. This methodology has enabled rapid identification and assessment of potential groundwater resources, salinity and seawater intrusion hazards, and groundwater dependent ecosystems in several priority regions.

Mathematical Model of Benefits and Costs of Coal Mining Environmental

Environmental sustainability is a key issue of the coal mining sector. This is because the impact of damages on activities undertaken in this sector is deemed vulnerable to environmental sustainability. The damage that occurs has an impact on environmental unsustainability. The value of environmental sustainability is set forth in the Government Regulation No. 46 of 2017 on Environmental Economic Instruments. Under this regulation, any activity that has an impact on the environment including the coal mining sector shall assess the damage it causes. The mathematical model of environmental benefits and cost of coal mining discovered by Juniah (2013), is an expansion of the extended mathematical model of the benefits and costs of Munasinghe (1997). This model can be used and implemented to assess environmental losses and determine the value of environmental sustainability of coal mining as intended by the Government Regulation of the Republic of Indonesia. The environmental losses can be minimized by utilizing water void mine as raw water. This model can also be used by government, stakeholders, and mining investors to assess the sustainability of the coal mining environment for the resulting externalities, and the utilization of mine void water as raw water.

India’s resource (inter)nationalism: Overseas mining investments shaped by domestic conditions

Indian companies - both state- and privately-owned enterprises - have gradually begun to invest in extractive industries beyond the boundaries of the country in recent decades. Yet, little is known about them. This article traces how domestic political-economic conditions shape the ways in which India’s emerging multinational companies operate abroad. Within India, a national, economic imperative for energy security and support to domestic industry drives the mining agenda. While the private sector is rhetorically dominant, state support remains crucial in handing over controversial land and forested tracts, and in defusing various conflicts across enormously variable social and operational environments. This article analyses how Indian international investments changes traditional company reliance on the Indian state, reshapes accountability relations, and supports mining operations shaped by highly uncertain domestic experiences, rather than global guidelines and extractive industry best practices. Specifically, it examines how India’s resource nationalism plays out overseas by drawing on empirical material from Indonesia and Mozambique. The article concludes that resource nationalism, as conceived so far, fails to justify the behaviour of Indian investments in extractive industries in the contemporary, globalised world characterised by new actors who do not accept the existence of global best practices.

Problems of social acceptance of mining activities and ways of minimizing them in the EU countries

Social acceptance for mining activity is one of the important elements determining its success. In addition to formal and legal conditions related to the nature of protection and spatial planning, it is one of the major barriers that limit or even hold back this activity. Over the last several years, a constant increase in such unacceptance can be observed in both Poland and most of the European countries, although the degree of occurrence of this phenomenon is diverse. It is confirmed by surveys carried out by the author as part of the already completed EU Minerals4EU project. The paper discusses the results of these studies and attempts to explain the reasons for the negative attitude of societies to mining activity. The activities undertaken to change the attitude are also presented, in particular the Social Impact Assessment (SIA). The objectives of the assessment are similar to the purposes of generally applicable Environmental Impact Assessments: identification of all possible limitations of planned exploitation, and their evaluation and minimization, necessary to obtain a favourable environmental decision, and, in the case of the SIA, to obtain social acceptance for the planned mining investment. In some EU countries, e.g. Denmark and Greenland, the development of a separate SIA report is a compulsory element of concession proceedings. The paper discusses the adopted formal scope of this document and the advantages of such a solution, enabling the anticipated operation of the future investor to achieve the planned goal.

Concession Stands: How Mining Investments Incite Protest in Africa.

Foreign investment in Africa's mineral resources has increased dramatically. This paper addresses three questions raised by this trend: do commercial mining investments increase the likelihood of social or armed conflict? If so, when are these disputes most prevalent? And, finally, what mechanisms help explain these conflicts? I show, first, that mining has contrasting effects on social and armed conflict: while the probability of protests or riots increases (roughly doubling) after mining starts, there is no increase in rebel activity. Second, I show that the probability of social conflict rises with plausibly exogenous increases in world commodity prices. Finally, I compile additional geo-spatial and survey data to explore potential mechanisms, including reporting bias, environmental harm, in-migration, inequality, and governance. Finding little evidence consistent with these accounts, I develop an explanation related to incomplete information-a common cause of conflict in industrial and international relations. This mechanism rationalizes why mining induces protest, why these conflicts are exacerbated by rising prices, and why transparency dampens the relationship between prices and protest.

Comparative analyses of the return on investment of 2013 and 2015 mineral policy reforms in Burkina Faso

This paper evaluates the effects of the changes in Burkina Faso’s mineral policies of 2013 and 2015 and their economic attractiveness using the Natougou Project as case study. Cash flow analyses shows a higher NPV of US $93,817,833.84 and an IRR of 44.67% under the 2015 Mining Code. Sensitivity analysis shows the project was less sensitive under the 2003 Mining Code as it takes a 18.25% decrease in the revenue for the project to break even as against 13.04% under the 2015 Mining Code. The project was insensitive to changes in operating cost and capital cost under the 2003 Mining Code but will not be viable if the capital cost and operating cost increase beyond 30% and 32.75% respectively for the 2015 Mining Code. An amount of US $ 321,488,366.61 will accrue to the government for 2015 Mining Code as against US$ 245,442,053.07 for the 2003 Mining Code. Keywords: Mining Code, investment, physical policies, dividends, sensitivity analysis, government and project

Inversión minera, conflictividad y pobreza regional en el Perú 2007-2017

Inversión minera, conflictividad y pobreza regional en el Perú 2007-2017

“New Extractivism” in Mexico: Hope and Deception

This paper traces the evolution of mining law in Mexico, including the most recent round of reform, and discusses the social and environmental impacts of mining in the region of Soconusco in the state of Chiapas. A set of mining reforms that passed between 2013 and 2014 provided the necessary impetus for a rise in mining investments in Mexico. These reforms have been couched in the language of “new extractivism.” In this approach favored by the left, extractivism is embraced as a development strategy along with the goal of redistributing some of the revenues to rural areas where these activities take place. In addition, these communities are to be consulted on how the funds will be spent. As fortunes have been made, however, the results have fallen short where environmental protection and community support are concerned.

Eufrásia Teixeira Leite: personagem biográfica romanceada

Eufrásia Teixeira Leite (1840-1930) descende da aristocracia brasileira, de família cuja fortuna foi amealhada pela exploração das minas, pela exportação de café e por investimentos em títulos e ações. Sem irmãos do sexo masculino, recebe educação pouco usual para mulheres à época. O pai a inicia no mundo das transações e aplicações de recursos financeiros. Órfã, passa a gerir a herança que cabe a ela e à irmã, mudando-se ambas para Paris. Essa condição privilegiada teve seu custo pessoal. O envolvimento com o político abolicionista Joaquim Nabuco (1849- 1910) limitou-se a encontros rápidos e troca de correspondência. A impossibilidade dessa paixão recíproca chegar à união legal é matéria de dois romances do século XXI, corpus da presente investigação: Mundos de Eufrásia, de Cláudia Lage, (2009), e Um mapa todo seu, de Ana Maria Machado (2015). O objetivo é apreender como se produz o rendimento romanesco a partir dos dados biográficos.

Mining investment and a fiscal regime that promotes the investment: an inter-temporal model

Mining investment and a fiscal regime that promotes the investment: an inter-temporal model

Land grabbing “from below”? Illicit artisanal gold mining and access to land in post-conflict Côte d’Ivoire

The illicit artisanal and small-scale mining (ASM) of gold (“orpaillage”) in Côte d'Ivoire/Ivory Coast is considered an “epidemic” by the Ivoirian government, which sees it as harming the country’s efforts to attract large-scale mining investment. Rural ‘traditional’ communities are often portrayed as helpless victims of the ‘greed’ of artisanal miners, who come from all over the West African subregion, and whose actions destroy valuable farmland. In analysing this issue as “land grabbing from below”, this article emphasises the agency of local landowning communities in their interactions with artisanal miners, thereby de-obscuring the negotiated nature of artisanal mining. Often, mutually beneficial agreements are concluded, in which local government officials often play a brokerage role. We find that the variation in compensation and levels of local control over mining activities are strongly linked to the strength of neo-customary land ownership structures and the respect they can command from strangers, as well as whether or not the artisanal miners are acting on behalf of, or are supported by, powerful political and security interests.

Rare earth elements price forecasting by means of transgenic time series developed with ARIMA models

A time series can be thought of as a numerical organism with a continuous nature from a chronological point of view and something that is permanently updated. Up to this moment time series research related with their features, traits, and characteristics, is mainly focused on data mining, in order to discover hidden information or specific knowledge within the time series or their transformations. However, time series representation is crucial, as they are difficult to handle in their original structure due to their high dimensionality.In this paper, the “theory of transgenic time series” is developed, and applied to the forecasting of several rare earth oxide prices: dysprosium, europium, terbium, neodymium, and praseodymium oxides. This theory addresses, specifically, the existence of metal price cycles and the presence of anomalous phenomena that the theory allows to eliminate from the time series, improving the accuracy of the forecast.After representing the time series in a way that allows their genome to be sequenced, a restriction enzyme is defined in order to create a genetically modified time series. There was no need to develop DNA ligases as time series can be cut and pasted without further considerations.Results clearly state that transgenic time series lead to more accurate short term forecasts in cases where a consistent time series genome can be represented. Further research should address the feasibility of developing more accurate long term forecasts by adding new gene sequences based on the time series genome, in order to achieve greater confidence from investors and professional advisers in the feasibility studies developed for future mining investment projects.Finally, it has to be remarked that this theory has nothing to do with “genetic algorithms”, a metaheuristic that was inspired by the natural selection process and not by the sequencing and manipulation of the genome.