Today, mining companies are increasingly judged in the court of public opinion as much as their stock is evaluated on the various exchanges. One could easily argue that the two are interdependent. And, whether they take a stance that is anti-mining, pro-environment, or one that supports indigenous people, the speed at which non-governmental organizations (NGOs) can now react, leaves the mining community with no margin of error in mine plans.

Similarly, the financial community rewards companies that act responsibly and vice versa. During the past five or six years the financial industry has developed a set of tools to evaluate investment risk in the developing countries. One of those tools, the Equator Principles (See p. 52), is an industry benchmark for determining, assessing and managing social and environmental risk in project financing. Applied to all new projects with capital cost of $10 million or greater, 10 principles address various project financing considerations. The principles also extend to project finance advisory activities.

Society’s expectations for mining and exploration companies are growing and the sector is receiving more political attention than ever before. More industrialized areas in developed countries have exhausted their natural resources and they are now turning to developing countries, who want a larger share of the profits. If mineral resources are to be used effectively as a springboard for economical and social development in these frontier regions, the mining business, regional governments and the people will have to work together.

Globalization requires trust and cooperation. Many resource-rich countries are considering or have already taken control of mining leases under a nationalization scheme or they have enacted unreasonable royalty structures. In many cases, a developing country does not understand how to manage its new found wealth. Developing countries with successful mining programs should transfer that knowledge to those that need it. Otherwise, the royalties and fees will line the pockets of dictators or fund bureaucracies rather than strengthening the country’s physical and social infrastructure.

Mining can be the catalyst for wealth creation in the regions that need it most. For indigenous people living in remote areas, a job at a mine means a chance to earn a better living and possibly build a career with transferable skills. Exploration programs and feasibility studies aside, the best way to develop partnerships with indigenous people and rural communities is through a balanced, transparent relationship. Demonstrating respect, as well as showing some patience and cultural sensitivity, is the best way to earn the trust of these people.

Steve Fiscor, Editor-in-Chief, E&MJ