Not just ignoring the conclusions of its recent Extractive Industries Review (EIR), the World BankPublished by MAC on 2004-10-12
Not just ignoring the conclusions of its recent Extractive Industries Review (EIR), the World Bank is set to increase its funding for mining by nearly 50%. It justifies the move as enabling it to influence the social and environmental parameters of a project. In fact, by targeting copper (one of the world's most toxic minerals) lower-income countries and above all, the bull market in metals, it may simply compound the very "what not to do" precepts of the EIR itself.
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World Bank To Boost Investment In Mining Projects
WB Press Review
October 12 2004
The World Bank will increase its investment in mining projects in developing countries, with plans to get involved at an earlier stage to ensure better practices and less corruption, the bank's chief mining official said, Reuters reported Monday (10/11).
Speaking of a new climate of optimism as global metal prices reach record levels and mining activity picks up, Rashad Kaldany said the bank wanted its increased investments to bring greater influence in pushing environmental safeguards and more transparent book-keeping. "I do see the next two or three years as being strong years for new investment," said Kaldany, director of the bank's oil, gas, mining and chemicals department.
Critics have long accused the World Bank of investing in extractives projects in poor countries that do little to advance its chief mandate of alleviating poverty. They cite poor environmental policies and corruption as major problems. The bank's effectiveness is being tested in a high-profile oil project in Chad to show that petro-dollars can flow to the poor. Kaldany said it now wanted to do the same in mining.
A review of the bank's involvement in the financing of oil, gas and mining projects this year concluded that it should stay in such projects but be more selective to ensure the projects meet its environmental and social standards. Kaldany said the bank's desired tactic of getting involved as early as possible in new projects was timely because the current high prices for metals made speculation and exploration in less developed regions more feasible. The World Bank already operates in much of the developing world, giving it a better chance to force new projects that receive some of its money to adhere to proper environmental and anti-corruption standards, he said. "We have received senior management and board approval to get involved at an earlier stage even helping companies prepare feasibility studies so they address the social and environmental issues early on," he said.
The bank's financing of mining projects has traditionally been made by its private sector arm, the International Finance Corp, which buys stakes in projects as a way of contributing to development. With mining activity increasing, Kaldany said he expects the IFC mining investments will increase to about $150 million a year from $107 million in 2004. As of August, IFC's investments in mining totaled $431 million in 23 projects, or 2.4 percent of its total portfolio. "It's a question of responding to the market place," he said, adding that despite merger fever in the industry over the past decade, new exploration companies have formed to exploit the current robust conditions.
Kent Lupberger, the bank's senior manager for the mining investment division, said the IFC's mining investments had mainly been in gold and aluminum. But he said the IFC was seeking more investments in copper, where there was a global shortage. Lupberger said part of the IFC's investment strategy is to develop infrastructure around projects, including ports, railroads and even power that would benefit communities long after the life of a mine. "Our whole focus these days is not only to mitigate the negative aspects but create positive aspects, so when a mine site is closed there are opportunities left for people," he said.