JICA's Strategy Paper For Mining Sector Japan International Cooperation Agency
Definition of target areas of mining This paper covers three metal mining resources as non-ferrous metal as follows, Base metals such as copper, lead, zinc and other basic materials for industries Rare metals (including rare earth elements) indispensable for current industrial equipment Precious metals such as gold, silver, and platinum Petroleum, natural gas, coal, geothermal heat and other energy resources and non-metal resources are not covered here. Also, this paper covers the activities in the fields of exploration, mining, concentration, refining and other operations closely related to production and operation in terms of mine pollution countermeasures. However, environmental issues caused by general mining activities are not covered in this paper. Metallic mineral resources Iron Non-ferrous metals Base metals Precious metals Earth resources Mineral resources Biological resources Water resources Soil resources Non-metallic mineral resources (Industrial mineral resources) Energy resources Coals Petroleum Natural gas Geothermal heat Rare metals (Including rare earth elements) Figure 1: Earth resources and mineral resources Source: Yoshitaka Hosoi, Mineral resource frontier stretching from the land to the bottom of the sea, 2012 1
1. Outline of JICA's cooperation in mining sector 1-1. Introduction Generally, mineral resource is a strong method for developing countries to obtain results in comparison with growth industries in the short term. The effort of mineral resource is not only the development of mines sector, it has a great influence on the society and economy of the country concerned through the establishment of social infrastructure, regional development in remote areas. And it also contributes the human resource development of engineers and technicians in various fields. In recent years, the global demand for mineral resources has been decreasing due to slowdown of economic growth in China, but the demand is expected to increase by economic growth of world economy in the long term. Under these circumstances, the developing countries with a mineral potential have desired to promote mining industries, and the mining activities become higher position in supporting the future economic development. It is extremely important to advance the mine industry in developing countries for Japan and other importing countries of mineral resources. As the result, these countries could secure of continuous and stable mineral resources from multiple channels. On the other hand, the assistance of mining development is important to the international economic system and the sustainable development in developing countries. A vast amount of fund and advanced technology are necessary to discover mineral resources and obtain economical profits. But most of the developing countries face a short of fund and technology, and these governments encourage the investment of foreign capital. However, government of developing countries lacks knowledge of promotion and regulation of mining company. When the foreign mining companies participate the business in the developing countries, there are many points like as lack of legal systems, the enforcement systems, basic geological information, infrastructure, political or social risk, security risk. Even if the foreign mining companies participated and mining resources are exported and developed, the following important issues are still remained such as 1) appropriate control of mining income, 2) development investment, 3) environmental and safety measures, and 4) preparedness for the resource depletion after the 2
measures for closing mines. If the developing countries have abundant resources and these resources progress, they could not obtain the result in economic growth, reduction of poverty and rectification of disparities by the failure of governance or economic policy. It may be considered as "Resource Curse" 1 or "Dutch Disease" 2. The developing countries who has the mineral resources require a great amount of knowledge for the sustainable development such as mineral resources management, legal system, resource exploration, closing of mines, mine safety, mine pollution countermeasures, socioeconomic measures surrounding mines, public finance system, and environmental measures. 1-2. Purpose Japan has had a lot of mines in the country until recently, and has overcome mine pollution issues by organizing and operating legal programs and systems for mineral resource control. Although the scale of mining companies in Japan has become smaller than those in other countries, companies are still proud to have excellent exploration technology, refining technology, environment related technology, and so on. JICA's cooperation program to the developing countries is highly significant because it can result in contributing a sustainable and stable mineral resource supply to the global market through providing knowledge of Japanese experiment. The JICA's purpose of cooperation in mining sector is to the contribution to the creation of a win-win relationship with developing countries, considering both the cooperation to the mining development issues in developing countries and the resources to be secured for Japan. 1 Economic term. The phenomena where economic development is slow in spite of abundant resources and implementation of resource development. As the economic development is not always mutually related to the absence/existence of the resources, many economists currently consider that "Resource Curse" describes that explanatory variable of abundant resources alone is not sufficient to generalize the economic theory. 2 Economic term referring to large-scale resource development projects that cause various unfavorable economic phenomena on another side. Since this term was used to describe the phenomena which occurred in the underwater natural gas development by the Netherlands, economists have pointed out that the term, "Disease", is not suitable in the first place. 3
2. JICA's cooperation policy -Four pillars for Mining sector development- JICA will support mainly to 1) organizations investing in the environment and 2) the capacity development in mining with an aim to realize dynamic, sustainable, and inclusive mineral resource development in the resource-rich countries. As for the cooperation fields that can bring short-term effects, JICA will provide the government of developing countries with both "soft" and "hard" support such as the efforts in organizing systems, and the surrounding infrastructure to be required for private investment. As for the cooperation fields that can bring med-and-long term effects, we will establish a foundation for mineral resource control by providing support to the enhancement in the administrative function and human resource development in the government of developing countries, and we will also promote mutually-beneficial relationships of human network with Japan. Specifically, the following four fields are established as the priority areas. Figure 2. Four pillars and cooperation policy 4
2-1. Four pillars (1) Infrastructure and Regional Development As for the areas that can bring short-term effects, JICA will cooperate on infrastructure such as road, railroad, port/harbor, electricity, water and other infrastructure around mine. And JICA also supports to promote communities surrounding mine. For these areas, JICA's three schemes, namely technical cooperation, loan assistance and grant aid, will be utilized organically. Specifically, the following items are included: Providing the supply of electricity, water, etc.; Organizing the road, railroad, port/harbor, and other transportation routes; Developing hospitals, schools; Promoting the regional communities surrounding mines; and Revitalizing the towns after the closure of a mine, etc. (2) Policy Support and Legal System Development As a part of the investment climate, JICA will cooperate to concrete planning and policy formulation for the mining sector, organization of legal system, policy, implementation system and basic information. These are necessary for the appropriate mineral resource management, measures for promoting private investment. Specifically, the following items are included: Establishment of national plan such as the mining sector master plan; Organizing the law (Exploration Act, Act on foreign capital introduction, etc.) and organizing the enforcement system; Advice on appropriate administration of mining income and on public finance; and Human resource development (3) Mineral Resource Management JICA will enhance the administrative function of the developing countries through sustainable mining development and appropriate resource management. Specifically, we will provide support for the establishment of systems and the provision of information necessary for the smooth mining operations by the private sectors. Details are as described below. 5
2. JICA's cooperation policy -Four pillars for Mining sector development- Remote sensing Basic survey on mineral resources (airborne geophysics, wide-region geological survey, geochemical exploration) Collecting data of mineral resource exploration by the government and private sectors Creating and operating the Geographical Information System (GIS) Creating and operating the inventory map Analysis of mine resources and minerals, etc. Developing the legal system related to the items as shown above Although the cooperation in these areas requires a relatively long period of time, it is directly connected to the creation of the relationship of trust and human network among Japanese companies, universities, research institutions and developing countries. (4) Mine Safety and Environmental Measures for Mines JICA will cooperate to the administrations in charge of mine safety and environment for mines. We will take measures to achieve sustainable mineral resource development by considering the influence of mine development and mining activities on the environment, society, gender, etc. In this area, we will implement cooperation by fully utilizing the excellent environment related technologies of Japan. The specific items are as shown below. Organizing the mine safety act, mine pollution act, mine environment act, act on closure of mines, etc. Transferring the damage mitigation technology such as mine environment monitoring and mine pollution prevention Transferring the environment restoration technology Understanding the environmental status of the related regions prior to the mine development Mineral recycling (including urban mines), etc. 6
2-2. Sharing of roles with other bodies In Japan, an organic and systematic collaboration system for mining (One-stop system for securing overseas mineral resources), has been implemented such as the Ministry of Economy, Trade and Industry(METI; leading) with the participation of JICA, Japan Oil, Gas and Metals National Corporation (JOGMEC), Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI) and other government-related bodies. Therefore, JICA will implement collaboration with these organizations. JICA used to conduct research on the amount of available mineral resources, condition of mineral deposit, and feasibility of development in developing countries in collaboration with the JOGMEC (and its predecessor: former METAL MINING AGENCY OF JAPAN). Currently, the research projects have been changed to non-oda projects, and the projects have been implemented by the JOGMEC. Therefore, JICA focuses on the essential support for developing countries to solve development issues that are not covered by the JOGMEC's projects. Specifically, JICA will implement cooperation in technical assistance and human resource development by targeting the government sector in developing countries. Figure 3. Roles of JICA and other bodies 7
2. JICA's cooperation policy -Four pillars for Mining sector development- 2-3. Special Notes (1) Sustainable and mutually beneficial relationship JICA should be focused on the solution of the most important development issues in developing countries, by paying attention to the creation of a mutually beneficial (winwin) relationship. The greatest emphasis should be places on the sustainability of the win-win relationship, and following up of JICA former projects should be made more carefully than ever and for a long term. (2) Collaboration with other organization Projects should be implemented efficiently in consideration of the roles of government related organizations in Japan while promoting the information sharing and collaboration. Also, efforts should be made through the effective collaboration with universities, research institution, private sector and other existing resources in Japan. (3) Appropriate resource allocation and benefit for the communities JICA will cooperate the creation of systems and programs, whose interests obtained from mining should be appropriately controlled and that resources should be appropriately allocated. Therefore, these systems contribute to the sustainable development of the society and economy through the development of economic infrastructure such as roads, railroads, ports, harbors, electricity and water, and the benefit to the surrounding communities, for example local job creation and other regional promotion. (4) Consideration for the environment/society and gender Based on the characteristics of mining development that has a great influence on the surrounding environment, mine development should be promoted with a careful consideration to the environment, society and gender through the measures for waste, goaves, waste water, flue gas as well as the measures after closing mines. 8
3. Cases of cooperation by JICA 3-1. Infrastructure and Regional Development Case 1 Vietnam: Development of infrastructure around the Dong Pao rare earth mine development Based on the resource development basic survey jointly conducted by JICA and former METAL MINING AGENCY OF JAPAN (currently JOGMEC) in 2000-2001, a rare earth mineral deposit was found in the Dong Pao district. In the Japan- Vietnam Coal/mineral Resource Policy Dialogue in January 2009, both side agreed joint development by the Vietnam and Japanese companies. In October 2009, "Small-Scale Pro Poor Infrastructure Development Project (3)" Yen Loan Agreement (L/A) including the development of road and water supply system in Dong Pao district was signed. This loan assistance aims to reduce poverty through the development of infrastructure for roads, electricity, water supply and irrigation in the target areas. The project contributed to the community development (employment promotion, economic effect) through the construction (approximately 650 million yen) of the road to be used both as the access to mining development and as the community road in Dong Pao district. Hanoi Dong Pao district Local city Road used both as the access road and as the community road in Dong Pao Dong Pao district 9
3. Cases of cooperation by JICA 3-2. Policy Support and Legal System Development Case 2 Mongolia: Data Collection Survey on Industrial Development on Copper Resources (2014~2014) Export of mineral resources accounts for 80% of all amount of export in Mongol, and industrial development on copper resources is one of the most important industries in Mongol same as coal industry. The Mongolian Parliament has identified 3 copper deposits as strategic important deposit, and one of the objectives of its Mining strategy is to develop smelter in Mongol. However Mongolian government has not enough experience nor human resources to analyze the situation on copper industry to formulate the development strategy for the industry. Under the situation, JICA assisted Mongolia government to analyze the situation on copper industry of Mongol and all over the world, challenges on policy level and technical level to develop copper industry, and economic assessment on copper industry development, etc. 3-3. Mineral Resource Management Case 3 Malawi: Project for Establishment of Integrated Geographic Information System (GIS) Database for Mineral Resources (2011~2013) Malawi is known for having much potential of rare earth elements and Uranium etc., therefore private company has interests in investing for the mining sector. Malawi government has placed the mining sector as the growth sector for sustainable economic growth in its development plan, and has been actively promoting the entry of private enterprises into the mining sector. However the geological information has been rarely updated since 1960s and the mineral resources information was insufficient. To improve these situation for further development in the mining sector, the project has started in the field of 1collection, processing and analysis of necessary geological information by remote sensing; 2building of GIS; and 3capacity development of the Geological Survey Department. 10
Case 4 Training in Japan "Sustainable Mining Development" (2012~2014) JICA organize the training courses for administrative officers in charge of mineral resources in developing countries (mid-level executive candidates) to improve the ability by the mineral resources, plan, implement, promote the appropriate policy on economical development and provide instruction to minimize the environmental impact. The training aims to develop the idea and knowledge on mineral resource development and to study the method for sustainable and environmentally-responsible mineral resource development. Case 5 Training Program for Human Resources Development in the Mining Sector (Kizuna Program)(2014~) Generally, promotion of the mining sector is a strong method for developing countries to achieve economic growth in a short term. However, the government of developing countries don t have enough knowledge and experience for mineral resources management such as formulating mining legal systems, basic geological information, exploration, development, mining safety, and environmental countermeasures, etc. Based on the background described above, the Kizuna program, which aims to develop human resource in mining sector for overcoming these obstacles, has started. The program consist of not only obtaining the Master/Doctor Degree in the universities in Japan, but also internship program, JICA mining policy and management course, overseas field research etc. 11
3. Cases of cooperation by JICA 3-4. Mine Safety and Environmental Measures for Mines Case 6 Cambodia: The Project on Capacity Development for Mining Administration (2014~2019) The Royal Government of Cambodia (RGC) is intending to promote the mineral resources sector to stimulate the economic growth and contribute to the reduction of the poverty in the country, but the government need more experience for the basic technology of exploration, mining, processing, environmental safeguard and technical regulations concerning the mine safety. To overcome the situation, the project, which aims to strengthen its human resources and increase capacity to manage safe mining operation and environmental safeguard effectively, has started. Case 7 Serbia: The Project for Research on the Integration System of Spatial Environment Analysis and Advanced Metal Recovery to Ensure Sustainable Resources Development (SATREPS) (2015~2020) The Bor Mine in Serbia has been active for over 100 years, the mine has discharged tailing and mine wastewater, so serious environmental impacts were recognized in the area from Bor mining area to the downstream basin. The affected area is so wide that it is difficult to evaluate its environmental impact for such wide area, and how to take measure the environmental issue. The project aims to solve the environmental problem caused from mining activities in Serbia by developing (1) evaluation and analytical methods by utilizing remote sensing technologies to grasp the properties of contaminant for widely spreaded areas, (2) technical method of detoxification and resources recovery from contaminants. 12
3-5. Results of cooperation projects (from 2007 onward) (Metallic mineral resources only. Excluding the joint survey with the JOGMEC (former METAL MINING AGENCY OF JAPAN)) Country name Project name FY for implementation Scheme Seribia The Project for Research on the Integration System of Spatial Environment Analysis and Advanced Metal Recovery to Ensure Sustainable Resources Development 2015-2020 SATREPS Cambodia Myanmar Mozambique South America Mongolia The Project on Capacity Development for Mining Administration Training on Capacity Development for Mining Administration Project on Capacity Development in Mineral Resource Sector Data Collection Survey on Mine Environment in South America Data Collection Survey on Industrial Development on Copper Resources 2014-2019 2014-2019 2014-2019 2014-2015 2014-2014 Malawi Project on Capacity Development in Mining Sector 2013-2018 Technical Cooperation Project Country focused training Technical Cooperation Project Data Collection Survey Data Collection Survey Technical Cooperation Project Fiji Deep Sea Minerals Environment Expert 2013-2015 Individual Expert Africa Mongolia Data Collection Survey on Mine Environment and Mine Safety in Africa Project for Capacity Building on the Natural Resource and Mining Sector 2013-2014 2012-2014 Data Collection Survey Technical Cooperation Project Mongolia Master Plan for Coal Development and Utilization 2012-2014 Development Survey Solomon Islands Angola Malawi Serbia Master Plan for Mining Development Capacity Building of Institute of Geology (IGEO) of ANGOLA Project for Establishment of Integrated Geographic Information System (GIS) Database for Mineral Resources Management of mining waste tailing damp at the region Bor To be newly implemented Development Survey 2012-2013 Expert/Training 2011-2013 Development Survey 2011-2013 Science and Technology Researcher Zambia Capacity Building in GIS Database Management 2010-2011 Individual Expert Vietnam Small-Scale Pro Poor Infrastructure Development Project (III) November 2009 ODA Loan Cambodia Advisor for Improving Mineral Resources Sector 2009-2013 Individual Expert Peru Project for Capacity Strengthening for Examination of Mine Closure Plans 2009-2011 Development Survey Bolivia Technical Advisor for Planning and Sustainable Mining Development 2009-2011 Individual Expert Albania Study for Master Plan for Promoting the Mining Industry 2009-2010 Development Survey Cambodia The Master Plan Study for Promotion of the Mining Industry 2008-2010 Development Survey Malawi Senior Volunteer 2008-2011 Volunteer Madagascar The Geological Mapping and Mineral Information System Project for Promotion of Mining Industry 2008-2011 Development Survey Laos Geological Mapping and Mineral Information Service Project for Promotion of Mining Indsustry 2007-2009 Development Survey Zambia Geological Mapping and Mineral Information Service Project for Promotion of Mining Industry 2007-2010 Development Survey Mauritania Project for the Reinforcement of Mineral Exploitation Research 2007-2008 Technical Cooperation Project 13
May, 2015