Mineral Resources and Development
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This series aggregates and presents the World Bank`s knowledge on oil, gas, and mining in an accessible format. It is meant to assist knowledge sharing and trigger policy dialogue on topics relevant to managing natural resource wealth sustainably and responsibly. The series is produced by the Extractive Industries Unit of the World Bank. The unit serves as a global technical adviser that supports sustainable development by building capacity and providing extractive industry sector-related advisory services to resource-rich developing countries.
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Publication Innovative Approaches for Multi-Stakeholder Engagement in the Extractive Industries(World Bank, Washington, DC, 2013-06) Sheldon, Christopher Gilbert; Zarzar Casis, Alonso; Caspary, Georg; Seiler, Verena; Ruiz Mier, FernandoExtractive industries (oil, gas, and mining) have the potential to generate significant wealth for developing countries and to serve as important catalysts for growth. They generate large revenues-through royalties, taxation, and exports-and create employment. In some cases, however, resource wealth is associated with political turmoil, deteriorating standards of living, civil conflict, and elite capture. The management's response to the Extractive Industries Review (EIR) and accompanying evaluations signaled a critical turning point in the World Bank Group's (WBG's) engagement in the sector, which had hitherto focused primarily on exploration and development activities, sector policy reform, and commercialization of state-owned enterprises. This publication presents four of the finalist case studies, selected on the basis of project: 1) scalability; 2) replicability; 3) innovation; and 4) level of multi-stakeholder collaboration. In an effort to better document and showcase the variety of ways in which country teams are working with different actors on the often sensitive topic of good governance in the oil, gas, and mining sectors, the World Bank Institute and the World Bank Oil, Gas and Mining Unit (SEGOM) initiated an internal case story competition in 2011.Publication The World Bank's Evolutionary Approach to Mining Sector Reform(World Bank, Washington, DC, 2010-10) McMahon, GaryIn this report, in addition to aggregate results, six brief case studies are used to highlight the impact of Bank supported mining sector reform on various indicators at different links of the value chain. These include: the impacts on investment; production and employment in Argentina; institutional capacity building in Papua New Guinea; production and fiscal revenues in Tanzania; community and regional development in Madagascar; mining sector reform and sustainable development in Mongolia; and mining and resource corridors in Liberia. The reforms of the 1990s and early 2000s, which focused on increasing investment and building regulatory capacity, have often had spectacular results with respect to investment and good results with respect to institution building. The work on increasing the efficiency and transparency of fiscal regimes has also achieved significant success, although it is still too early to make a final assessment. While the mining sector-specific aspects of the management and allocation of fiscal revenues are still in early days, there do seem to have been important impacts on poverty reduction and sustainable development in a number of countries that have undergone mining reform, although there has been an insufficient passage of time to make definitive judgments.Publication Expenditure of Low-Income Households on Energy : Evidence from Africa and Asia(World Bank, Washington, DC, 2010-06) Bacon, Robert; Bhattacharya, Soma; Kojima, MasamiPatterns of household energy use and expenditure have been the subject of a large number of studies. Household expenditures on energy-particularly, how much the poor spend-have policy implications for several reasons. First, policies to mitigate or cope with energy price shocks are increasingly focusing on targeted support to low-income households as a way of limiting the fiscal cost of such policies while offering protection to the most vulnerable members of society. Second, for governments looking to reform energy price subsidies, the effects on household welfare- especially effects on poor households-of price increases resulting from subsidy reduction/removal is an important policy consideration. But subsidies for liquid fuels targeting the poor are difficult to design and implement effectively, because liquid fuels tend to be used more by the rich than by the poor, and are also easy to transport (and hence to divert to non-poor users). For this reason, there is a growing recognition of the need to move away from price subsidies for liquid fuels to alternative forms of targeted assistance to compensate the poor for the adverse effects of higher fuel prices. Third, in areas where many households have not yet begun using modern commercial energy regularly, the amount they can afford to pay for such energy services is a relevant question. Quantifying expenditures on different types of energy at varying income levels provides a basis for addressing these questions. The paper also examines expenditures on motorized passenger transport and food, two items for which the price of oil is an important component of their cost structure and which are consequential in the budget of poor households.Publication Environmental Governance in Oil-Producing Developing Countries : Findings from a Survey of 32 Countries(World Bank, Washington, DC, 2010-06) Mayorga Alba, EleodoroThe Petroleum Governance Initiative (PGI) encompasses three general themes, or pillars, that address issues issues of transparency and economic responsibility, environmental sustainability and responsible community development. Of particular interest here is the second pillar, environmental sustainability; the PGI is currently involved in four main activities surrounding this theme: 1) assessing environmental governance and management in oil-producing countries-the topic of this paper; 2) conducting a strategic environmental assessment of oil and gas activity in Mauritania; 3) conducting workshops and preparing a toolkit on decommissioning and abandonment; and 4) providing in-country assistance on environmental management to a limited number of countries. This paper presents the results of a survey undertaken by the PGI to measure the environmental governance of oil-producing nations against a benchmark standard representing a compendium of good management practices for minimizing impacts of oil and gas development. The objective is to identify areas where the World Bank can provide assistance to improve environmental governance and management systems, particularly in those developing countries whose oil and gas industry is rapidly emerging as a major component of gross domestic product. Detecting governance gaps-and, more importantly, facilitating the rapid implementation of corrective measures-is an important challenge for the World Bank in its efforts to preserve natural habitats and the culture of indigenous peoples.Publication Sub-Saharan Africa Refinery Study(World Bank, Washington, DC, 2009-07) Hammitt, James; Robinson, LisaOver the past two decades, the growing awareness of the role that emissions play in human health and environmental degradation had led to a general movement in many parts of the world to control emissions to reduce the impacts. This movement has mainly taken two forms: 1) the development and subsequent required use of control devices for stationary sources and vehicle sources and, 2) changes in the specifications of transportation fuels to reduce emissions of the major pollutants. These trends originated in the industrialized countries and are now spreading, at different rates, throughout the world. As in other world regions, the first improvement in the specifications of transportation fuels in Sub-Saharan Africa was the elimination of lead. The phase out of lead is now complete and the World Bank and its partners are looking at the next step the reduction of sulfur in transportation fuels. The growing complexity of the vehicle emission control technologies for both personal vehicles and commercial trucks and the concomitant need for clean fuels.In addition to the growing awareness of the human health and environmental impact of vehicle source emissions, have placed increasing requirements on refineries. Sulfur is not an additive but a natural part of crude oil. Its removal processes presents both technological and economic challenges to refiners. However, by coming later than Organization for Economic Co-operation and Development (OECD) regions to ultra-low sulfur fuels, SSA refineries are in a position to benefit from the operating experience and process improvements obtained elsewhere in the refining industry.Publication Mineral Rights Cadastre : Promoting Transparent Access to Mineral Resources(World Bank, Washington, DC, 2009-06) Ortega Girones, Enrique; Pugachevsky, Alexandra; Walser, GotthardThis document proposes a set of generally applicable recommendations and good practices for creating a Mineral Rights Cadastre (MRC), an administrative body responsible for overseeing the process of granting and managing mineral licenses throughout a country. The document reviews lessons learned from World Bank-funded projects aimed at reforming mineral rights management and assesses the impacts and benefits of the implemented changes. The document focuses on the MRC system as a key regulatory agency of mining sector administration. This study is also intended to fill a gap in the literature on mining sector administration, as few publications since roughly the 1930s have been dedicated to the overall analysis of MRCs, particularly in relation to modern and recent mining cadastral practices. While the overall concepts and principles presented in this document are intended to be universally valid and applicable, there is no single solution to mining sector development, and it would be unrealistic to believe that actions that have been successful in one country can be directly transferred to others. The MRC of any given country will need to be adapted to that particular country's culture, tradition, existing legal framework, development capacity, and other factors. This document describes the trade-offs that may be necessary to arrive at an acceptable solution; using case studies, it also highlights concrete applications that can be recommended, based on typical country circumstances.Publication Financial Surety : Guidelines for the Implementation of Financial Surety for Mine Closure(World Bank, Washington, DC, 2009-06) Sassoon, MeredithIt is now accepted practice that when a company relinquishes a mining title, whether for an exploration or mining site, it is responsible for carrying out the rehabilitation of that site prior to departure. To ensure this is the case, most jurisdictions now require some form of closure plan or rehabilitation program to be submitted to the regulatory authority prior to the start of any work on the site. It is an increasingly common requirement for the closure plan to contain details of the estimated cost of rehabilitation and for a financial surety to be established at the same time. This report aims to provide governments with the information they need to make their own informed decisions. It is based on a review of existing financial surety systems in a number of countries. Questionnaires were sent out to a total of fourteen regulatory authorities; of these, nine provided sufficient detail about their existing financial surety systems to be included as full case studies. These are presented in the section case studies along with a summary of the latest European Union (EU) waste directives. Except where otherwise stated, the financial surety applies to all stages of a mining project, regardless of size. The purpose of the financial surety is to ensure that there will be sufficient funds to pay for site rehabilitation and post closure monitoring and maintenance at any stage in the life of the project, including early or temporary closure. The main aim of site rehabilitation is to reduce the risk of pollution, restore the land and landscape for an appropriate use, improve the aesthetics of the area, and prevent any subsequent degradation. The extent and cost of final site rehabilitation can be reduced if the site is rehabilitated even as it is being mined, so that the rate of restoration is similar to the rate of exploration or exploitation. This ideal is not often achieved, however; the majority of rehabilitation usually takes place once work on the lease has ceased.Publication Extractive Industries Value Chain : A Comprehensive Integrated Approach to Developing Extractive Industries(World Bank, Washington, DC, 2009-03) Mayorga Alba, EleodoroProper stewardship of revenue from the oil, gas, and mining industries has tremendous potential to lift people out of poverty and contribute to sustainable development. These industries create jobs directly and indirectly, transfer technologies and knowledge, and generate significant income. These benefits provide governments with a financial base for infrastructure development and social service delivery. The extractive industries, and the petroleum sector in particular, are known for generating high economic rent the difference between the value and cost of production and the government's share of this rent can be very large in times of high commodity prices, as in the last several years. The Extractive Industries Transparency Initiative (EITI) seeks to help resource-rich countries maximize the development gains from the exploitation of their oil, gas, and mineral resources by encouraging greater EI revenue transparency. Through the verification and full publication of payments made by companies and revenues from oil, gas, and mining received by governments, the EITI helps to safeguard against corruption and provides a powerful illustration of voluntary engagement of governments, industry, civil society and other stakeholders to establish a locally implemented global standard. This paper describes steps to improve EI revenue management, transparency, and accountability at each link of the value chain.Publication Vulnerability to Oil Price Increases : A Decomposition Analysis of 161 Countries(World Bank, Washington, DC, 2008-08) Bacon, Robert; Kojima, MasamiThis paper examines the levels of and changes in vulnerability to oil price increases between 1996 and 2006 in 161 countries for which data are available. Vulnerability defined here as the ratio of the value of net oil imports to gross domestic product (GDP) rises if oil consumption increases and oil production decreases per unit of GDP. By comparing the level of vulnerability of different economies at a point in time, those that are particularly vulnerable to oil price increases can be highlighted. This enables consideration of the factors (variables) that help determine the magnitude of vulnerability. Over time economies change in ways that may make them more vulnerable to oil price increases or less so, and the change in vulnerability will be related to changes in the underlying variables. The analysis this paper uses is a starting point for linking these factors. The study also examined changes in vulnerability by subdividing the period under review into two sub-periods, 1996-2001 and 2001-6. The oil price increase during the first sub-period was small, and correspondingly the change in vulnerability was also limited. The change in vulnerability was greater during the second sub-period, which saw a 2.5-fold price increase in nominal U.S. dollars. This paper highlights the role of changes in the oil share of energy and of energy intensity, both of which can be influenced by government policies, and also by oil production, which, even though it is largely a function of geology, can also be affected by a country's upstream fiscal, contractual, and regulatory frameworks.Publication Striking a Better Balance : Volume 5. Final Workshop Report and Stakeholders Submissions or Comments(Washington, DC, 2003-12) World BankIn July 2001, the extractive industries review (EIR) was initiated with the appointment of Dr. Emil Salim, former Minister of the Environment for Indonesia, as eminent person to the review. The EIR was designed to engage all stakeholders-governments, nongovernmental organizations (NGOs), indigenous peoples' organizations, affected communities and community-based organizations, labor unions, industry, academia, international organizations, and the World Bank Group (WBG) itself-in a dialogue. The basic question addressed was, can extractive industries projects be compatible with the WBG's goals of sustainable development and poverty reduction? The EIR believes that there is still a role for the WBG in the oil, gas, and mining sectors-but only if its interventions allow EI to contribute to poverty alleviation through sustainable development. And that can only happen when the right conditions are in place. This report makes major recommendations on how to restore the balance in the WBG - promote pro-poor public and corporate governance in the EI, strengthen environmental and social components of WBG interventions in these industries, respect human rights, and rebalance WBG institutional priorities. These recommendations have as the ultimate goal: to lift up civil society so it is balanced in the triangle of partnership between governments, business, and civil society; to raise social and environmental considerations so they are balanced with economic considerations in efforts at poverty alleviation through sustainable development; and to strive for a human-rights-based development that balances the material and the spiritual goals of life.