Mining Firms Research Articles

RETRACTED: Safety and environmental inputs investment effect analysis: Empirical study of selected coal mining firms in China

This study uses 2007–2012 panel data of 51 out of 100 top Chinese coal mining firms to calculate total factor productivity (TFP) and technical efficiency (EF) using Malmquist index. The study further examines the effects of safety, cleaner production investment and technological progress (represented by research and development (RD (2) larger coal firms have higher TFP and EF than smaller ones; (3) Technological progress has positive significant affects on EF, while safety and cleaner production inputs and the intersection of both factors separately exerts negative impacts on EF. Conclusions and recommendations are then made that: (1) if the main focus of coal industry's policy and regulation is on embracing short-term improvements in EF and adopting market mechanisms, then safety and cleaner production investment will be left out (2) focus should be on encouraging long- term increases in safety and cleaner production investments, while providing coal firms with step by step guidance on this investment; in order to avoid negative effects abrupt increases my exert on industry's EF and enable production through realistic economic means. (3) Short term focus should be on leading larger coal firms to increase technological changes so as to improve EF in the short run. (4) Moderation of the largest firms operations should be considered in order to maximize EF through technological progress.

How Accurately Can Convertibles be Classified as Debt or Equity for Tax Purposes? Evidence from Australia

Abstract The New Business Tax System (Debt and Equity) Act established a set of criteria by which convertible securities could be classified as “debt-like” or “equity-like” for tax purposes. Using data on 256 convertible issues made in Australia between 2001 and 2012, we show that there is a strong relation between, on the one hand, a convertible’s ex ante classification determined at issuance using the tax criteria and, on the other hand, its ex post classification based on the conversion premium at maturity. We conclude that the criteria have been an efficient means of classifying convertibles. We also find an industry effect where debt-like convertibles are more likely to be associated with the resources, metals and mining firms, whilst equity-like are mainly issued by the finance sector. This finding is consistent with the solution to a finance-sequencing problem in the former case, and the impact of capital adequacy regulation in the latter.

The impact of investment climate indicators on ownership and firm performance: evidence from different stone mines in Bangladesh

Investment in stone mining projects is always associated with risks as there might have relatively greater uncertainty of expected level of extraction. This study examines the degree to which firms operating in stone mines are facing risks and obstacles regarding their investment and profit, conditional on the investment climate indicators, ownership structure, and firm’s performance. Studies on investment climate are mainly based on macro level data, and firm level studies are relatively sparse (Dao, 2008; Cull and Xu, 2003; 2005). This sparseness may result from the dearth of micro-level data. This study provides findings that also fill-up this gap in the literature. The analyses are based on data collected in 2010 and 2011 and from 633 small, medium and large stone mining firms from Sylhet Division in Bangladesh. 112 of large firms reported that the source of their initial investment came from either bank loan or remittances or both, while in case of medium firm partnership between mine owners and individual investor who bears the mine digging and extraction costs played the dominant role (73 out of 209). However, 49.49 % of the small firms reported that either usury or microfinance through NGOs were the major source of their initial investment. The estimates obtained from ordered probit and IV-ordered probit models show that most sets of variables have statistically significant impacts on ownership and firm performance. Our findings suggest that factors like credit facilities, red tape captured by delay, regulatory burden, weak infrastructure, illegal payments such as bribe paid to the public officials, and acute labour shortages are responsible for changes in production and cost; and thus in investment climate. As property rights are defined and ownership structures are fully explored, the stone crashing firms are relatively risk free. In case of small and medium firms, firm’s location plays an important role. Experience matters for large firms. With the finding that acute labor shortages is a significant bar to profitable investment climate, large scale labour migration from less developed parts of the country to the mining areas would be one of the best feasible solutions. Bribe or illegal payment made by firms should be mitigated through increasing level of inspections by the administration. Our result accounts for the heterogeneity of firms and may be important for policy makers to develop clear, consistent and unambiguous approaches to fostering a favourable investment climate for firms under consideration especially for small firms.

Community Development and Corporate Social Responsibility in Ebonyi State : An Investigative Study of Selected Mining Firms and Communities

Community Development and Corporate Social Responsibility in Ebonyi State : An Investigative Study of Selected Mining Firms and Communities

Sustainability performance: It’s impact on risk and value of the firm

This study aims to analyze the relationship between the sustainability performances (corporate social performance, good corporate governance, and financial performance) and the risk as well as the value of the company. Employing the data from publicly listed mining firms in Indonesia and structural equation modeling to examine the hypotheses, we find that the corporate social performance improvement can be served to increase the corporate financial performance. Implementation of good corporate governance may contribute to improve financial performance and reduce the risk of the company. In short term, investors will appreciate the social and environmental responsibility undertaken by the company only if its implementation can contribute to the improvement of the company’s financial performance. In long term, social and environmental performance improvements made by the company will be able to increase the value of the company directly. Investors consider companies that apply the principles of good corporate governance not just as regulatory compliance, so that it can provide benefits for improving corporate performance and value of the company, in the short term and long term.

'Let Us Care for Everyone's Home': The Catholic Church's Role in Keeping Gold Mining Out of El Salvador

El Salvador’s refusal to allow industrial gold mining within its borders sets it apart from most other Latin American countries. Since 2007, three successive presidents from opposing parties have maintained a de facto moratorium that prevents all mining firms – international and Salvadoran, public and private – from accessing El Salvador’s estimated 1.4 million ounces of gold deposits. A majority of Salvadoran citizens and political leaders alike are opposed to mining, citing the country’s environmental degradation, population density, and limited water resources. Yet opposition to industrial gold mining has not always been the majority position in El Salvador. As recently as the early 2000s, the Salvadoran government, with support from international donors and creditors, pursued metals mining as an opportunity for economic growth. The story of how El Salvador diverged from this extractivist path is multi-faceted. A key element has been the strategic involvement of the Salvadoran Catholic Church. This working paper explores the Church’s influence on the Salvadoran government’s decision to suspend all metals mining. The analysis examines the theological and practical motivations for the Church’s stance on mining. It also describes the strategic actions taken by the Church to promote its position. Ultimately, the involvement of the Catholic Church served to strengthen the grassroots anti-mining movement, to shape the public debate, and to sway the electorate, which proved decisive in the suspension of all industrial metals mining in this country.

The market premium for the option to close: evidence from Australian gold mining firms

AbstractThis study shows the market value of gold mining firms contains a premium for the option to close. The sample uses 41 gold mining producers listed on the Australian Stock Exchange from 1987 to 2013. The premium of the market price over the present value of cash flows is isolated and a pooled cross‐sectional regression tests the degree of association between that premium and theoretical option premiums. The results show market prices incorporate a premium reflecting the option to temporarily close operations. The magnitude of the option premium to close depends on whether firms are out or in the money options.

Mining Conflict and the Politics of Obtaining a Social License: Insight from Guatemala

Mining as a development strategy has become ubiquitous throughout the developing world. However, if mining firms want to take advantage of the most mineral-rich terrain in developing countries, they must engage with the communities living near projected mining operations. Firms may sometimes use violence to quiet local opposition, but increasingly, they will seek a “social license to operate.” This term refers not to the legal requirements firm must obtain, such as governmental and environmental clearances, but rather the elusive support of the affected local population that will help a firm avoid project delays, maintain a positive public image, and prevent further regulation of the mining industry. There is a lack of research on how firms pursue a social license to operate. Through a qualitative case study of a mining conflict in Guatemala, this article addresses two questions: First, how do mining firms obtain a social license to operate, in practice? Second, what results from this process? Using a mix of qualitative data collected in 2009–2011, the article analyzes how a large Guatemalan construction materials firm, Cementos Progreso, sought a social license to operate in the indigenous municipality of San Juan Sacatepequez, Guatemala, and with what results. An alliance of firm and state constructed new institutions for citizen participation in local governance, promoted from within them the idea that mining was complementary with development, and backed up this discourse with tangible results. Government transparency and accountability improved, as did provision of basic services. The findings suggest that the local state, especially institutions designed to encourage citizen participation in local governance, can play a crucial role in determining whether and how mining firms can operate.

Environmental Liabilities and Diversity in Practice Under International Financial Reporting Standards

Our purpose is to encourage accounting regulators to address diversity in practice in the reporting of environmental liabilities. When Canada changed to IFRS in 2011, Canadian regulators asked the IFRS Interpretations Committee to interpret whether the discount rate to value environmental liabilities should be a risk-free discount rate. Old Canadian GAAP, and current U.S. GAAP, allow for a higher discount rate, resulting in commensurately lower liabilities. International regulators refused to address this issue expecting no diversity in practice in Canada. We investigate discount rate choices for a sample of Canadian oil and gas and mining firms and we show the expectation of no diversity in practice was wrong. Significant diversity in practice is evident: about one third of the sample firms choose a higher discount rate, avoiding a major increase in environmental liabilities on transition to IFRS. The evidence suggests that these firms had relatively larger environmental liabilities and that the discount rate decision is a strategic choice. The current diversity in practice in accounting for environmental liabilities is not acceptable as it is not consistent with the enhancing qualitative characteristic of comparability under the Conceptual Framework. Accounting regulators should act to create consistent and comparable reporting practice. Firms and managers facing larger environmental liabilities can choose to minimize environmental liabilities under IFRS, while it is the general public and society at large that bear the ultimate risk. The paper pushes forward the debate on whether recognised environmental liabilities should reflect the interests of equity investors, or if other investors and stakeholders should be taken into account.

Do gold prices cause production costs? International evidence from country and company data

This paper analyses the causal relationship between gold production costs and gold prices using a set of country and company data collected at the individual mine's level. We find strong econometric evidence for causality running from gold prices to gold production costs. The results are supported theoretically by the small amount of annual gold production relative to the total stock and the real options embedded in gold mines. The low flow to stock ratio of gold implies low market power of gold mining firms and thus an inability to significantly influence gold prices. The real options enable gold mining firms to adjust production costs conditional on the gold price; production costs thus follow gold prices.

The Determinants of Social Conflict in the Latin American Mining Sector: New Evidence with Quantitative Data

This paper builds on the case study work into conflict between mining firms and nearby communities through a statistical analysis of the determinants of social conflict at the local level in the mining sector in Latin America. The analysis is based on an original dataset of 640 geo-located mining properties at the advanced exploration stage and above, which includes GIS information on environment and land-use patterns around the property, sub-national socio-economic characteristics of the population, firm and mining property characteristics, as well as information about known social conflicts.

Making the Corporation, and its Critics Mining Capitalism: The Relationships between Corporations and Their CriticsStuartKirsch (Berkeley: University of California Press, 2014).Enacting the Corporation: An American Mining Firm in Post‐Authoritarian IndonesiaMarinaWelker (Berkeley: University of California Press, 2014)

Making the Corporation, and its Critics Mining Capitalism: The Relationships between Corporations and Their CriticsStuartKirsch (Berkeley: University of California Press, 2014).Enacting the Corporation: An American Mining Firm in Post‐Authoritarian IndonesiaMarinaWelker (Berkeley: University of California Press, 2014)

Determinants of leverage in mining companies, empirical evidence for Latin American countries

This paper applies static and dynamic panel data methods to explore the determinants and the trend of leverage across 14 mining firms in Mexico, Colombia, Chile, Brazil and Peru from the first quarter in 2004 to the third quarter in 2014, and also contrasts the results with relevant theories. We find that tangibility increases leverage, while growth and size do not have significant effect. Profitability reduces leverage, which is consistent with the first alternative of the Hierarchical Order theory. The Colombian firms start with lower levels of leverage and reduce it as tangibility, size, growth and profitability increase and hence, these firms are more financially stable, and their performance, in particular, is consistent with the first alternative of the Hierarchical Order theory. Lagged values of leverage are more robust determinants of present values of leverage than the other explanatory variables.

Mobile Miners: Work, Home, and Hazards in the Yukon’s Mining Industry

The Yukon is on the verge of a resource boom. A major change since the early 1980s has been mining companies’ increasing reliance on long-distance commuting to move their workers to mine sites. While long-distance commuting can be seen as reducing the benefits the Yukon receives from mining, it can also be seen as an effective way of reducing the negative impacts that arise from the boom and bust nature of the industry. Long-distance commuting also represents new opportunities for workers currently living in the Yukon. It represents the potential for longer-term employment without the need to continually move to different communities. Yet little has been written about the attitudes of these workers towards their employment situation. What are their major concerns? Are there specific concerns relating to their mobile lifestyle? As an exploratory attempt to answer these questions, this paper examines twelve in-depth interviews with respondents from diverse backgrounds who worked in the Yukon’s mining industry. The findings indicate that workers in long-distance commuting mining firms had a range of perspectives regarding their workplaces. Some are general concerns that are not unique to their mobile lifestyle, while others relate directly to this. In terms of long-distance commuting, it appears most workers responded positively and were content to travel. While the sample size was small, the research suggests several avenues for further research such as the situation of women in new mining operations, Aboriginal employment experiences, perceptions of safety, and the separation of home and work.

Mining with a high-end strategy: a study of Chinese mining firms in Africa and human resources implications

Research interest in Chinese businesses in Africa has surged in recent years. While state-owned firms have attracted considerable attention regarding the motives of their investment, relatively few studies have examined the strategy of the state-owned Chinese firms and human resource management (HRM) implications. Similarly, the causes underlying the expansion of Chinese mining firms internationally and the effects of management are yet to be adequately addressed in the international management literature. This study fills these research gaps through the investigation of the international expansion motives of four state-owned mining firms, the strategy adopted to facilitate this expansion and the HRM implications. Drawing on institutional theory and data from 39 interviews with government officials, managers and Chinese expatriates, factors such as why and how different institutional actors interact with each other at the strategic and operational levels to shape the Chinese mining firms’ business opportunities and constraints are examined. The study shows the Chinese mining firms’ flexible and pragmatic approaches to building connections with various institutional actors in the host country. They also develop organizational capacity through joint ventures and acquiring human resources from the international market. The study contributes to the knowledge in the international management area, a field that has been dominated by the study of private firms, by revealing the strategies and management practices of the Chinese state-owned multinational firms in the mining sector.

A Political Economy of China's Export Restrictions on Rare Earth Elements

We investigate why governments restrict exports of exotic raw materials taking rare earth elements as a case study. Trade restrictions on exotic materials do not have immediate macroeconomic effects. Relocating rare earth intensive industries is found to be the main reason behind China's export barriers. They are part of a more extensive strategy aiming at creating comparative advantages in these sectors and at overcoming path dependencies. Moreover, export barriers serve as a second-best instrument to reduce pollution and to slow down the depletion of exhaustible resources. Growing domestic rare earth consumption renders those increasingly ineffective. Rising reliance on mine-site regulation indicates that this fact is taken into account. Rare earth extraction is dominated by a few large companies; the demand side is dispersed. That speaks against successful lobbying for export restrictions. It appears as if the export barriers are set up to compensate mining firms.

Why do firms engage in selective hedging? Evidence from the gold mining industry

Abstract The widespread practice of managers speculating by incorporating their market views into firms’ hedging programs (“selective hedging”) remains a puzzle. Using a 10-year sample of North American gold mining firms, we find no evidence that selective hedging is more prevalent among firms that are believed to possess an information advantage. In contrast, we find strong evidence that selective hedging is more prevalent among financially constrained firms, suggesting that this practice is driven by asset substitution motives. We detect weak relationships between selective hedging and some corporate governance measures but find no evidence of a link between selective hedging and managerial compensation.

Why Do Firms Engage in Selective Hedging? Evidence from the Gold Mining Industry

The widespread practice of managers speculating by incorporating their market views into firms’ hedging programs (“selective hedging”) remains a puzzle. Using a 10-year sample of North American gold mining firms, we find no evidence that selective hedging is more prevalent among firms that are believed to possess an information advantage. In contrast, we find strong evidence that selective hedging is more prevalent among financially constrained firms, suggesting that this practice is driven by asset substitution motives. We detect weak relationships between selective hedging and some corporate governance measures but find no evidence of a link between selective hedging and managerial compensation.

Diffusion Model of Value-Added Technology in Indonesian Coal Mining Firm

Diffusion Model of Value-Added Technology in Indonesian Coal Mining Firm

Mining and extractive urbanism: Postdevelopment in a Mozambican boomtown

Mozambique has attracted international attention in recent years following the discovery of huge reserves of coal and gas deposits. A major focus of Mozambique’s extractives boom is the province of Tete, once a remote outpost but now a hub of power generation for the southern African region and an emerging centre of global investment in coal extraction. Some of the world’s largest mining firms from both established and emerging economies have descended on Tete, investing billions of dollars in developing concessions to extract some of the world’s largest untapped coal reserves with wide-ranging implications for the region’s political economy and effecting significant shifts in relations between state, capital and territorial control. At the urban scale, Tete city and its expanding periphery are increasingly characterised by enclaves and spaces of enclosure, as some groups benefit from and are integrated into global circuits of production whilst others suffer displacement and dispossession. In seeking to trace the emergence of Tete’s resource economy, the paper contends that three distinctive spatialities have resulted from these developments, including the infrastructure networks being constructed around the extractive industries, the enclave spaces arising from the coal boom (and the particular labour geographies that shape them) and the new and distinctive urban geographies that are the product of Tete’s rapid urbanisation. The paper seeks to assess the impacts, stakes and challenges linked to investments in extractive activities and looks at how the costs and risks are being differentially distributed within and between the affected communities.