ISSN-e: 3006-9467; ISSN: 0016-7975 / 1011-9565
Economía minera/Mineral economics/Economia da mineração
Ángel R. P. Paulo G. C.
Ing°Min°, MSc. Profesor Titular. Universidad de Oriente (UDO). https://orcid.org/0000-0002-6240-660X. Correo-e: arppgc@hotmil.com
José Herrero N.
Ing°Geó°, MEng. Profesor Titular. UDO. Correo-e: joseherreron@hotmail.com
Recibido: 2-6-21; Aprobado: 8-7-21
In order to contribute to mining industry survival, without which humanity would have to go back to prehistoric times, a preliminary proposal of a model for a holistically harmonious mining has been made, which has required a very broad review of what It has been history of the mining and mining industry, as well as of all the efforts that have been made by industry to be more compatible with the environment and the countries, and that has generated important transformations in the type of business that used to be the mining industry, which has been making it an increasingly innovative business dependent on research and development, while data on requirements for global environmental achievements based on inorganic mineral resources have been reviewed that must be produced, all of which allowed the preliminary proposal presented here, which consists of five dimensions of equal importance, namely, the dimensions: social, environmental, risk-takers, government, and research, development and innovation (R&D&i), concluding in a proposal that will surely be enriched by other authors who propose modifications to what is proposed here, and that will make the model every time less complex and easier to implement.
Con la finalidad de contribuir a la pervivencia de la industria minera, sin la cual la humanidad tendría que retroceder a tiempos prehistóricos, se ha realizado una propuesta preliminar de modelo para una minería holísticamente armónica, la cual ha requerido una muy amplia revisión de lo que ha sido la historia de la minería y la industria minera, así como sobre todos los esfuerzos que se vienen realizando desde la industria para ser más compatible con el ambiente y los países, y que ha generado transformaciones importantes en el tipo de negocio que solía ser la industria minera, lo cual la ha estado convirtiendo en un negocio cada vez más innovador y dependiente de la investigación y desarrollo, al tiempo que se han revisado datos acerca de los requerimientos en pro de logros ambientales mundiales y que se basan en recursos minerales inorgánicos que deben ser producidos, todo lo cual permitió ir desarrollando paralelamente la propuesta preliminar que se expone aquí y que consta de cinco dimensiones de igual importancia, a saber, las dimensiones: social, ambiental, de tomadores de riesgos, gubernamental y de investigación, desarrollo e innovación (I+D+i), concluyéndose en una propuesta que seguramente se irá enriqueciendo en la medida en que otros autores propongan modificaciones a lo aquí planteado que hagan al modelo cada vez menos complejo y más fácil de implementar.
Aqui, escreve-se ou copia o texto a traduzir Para contribuir para a sobrevivência da indústria mineira, sem a qual a humanidade teria de voltar aos tempos pré-históricos, foi feita uma proposta de modelo preliminar para uma mineração holisticamente harmoniosa, que exigiu uma revisão muito ampla do que tem sido a história da mineração e da indústria mineira , bem como todos os esforços que têm sido feitos da indústria para ser mais compatível com o ambiente e os países, e que tem gerado transformações importantes no tipo de negócio que costumava ser a indústria mineira, o que a tem vindo a tornar um negócio cada vez mais inovador e dependente da investigação e desenvolvimento , embora tenham sido revistos os dados sobre os requisitos para as realizações ambientais globais e com base em recursos minerais inorgânicos a produzir, todos os quais permitiram que a proposta fosse desenvolvida paralelamente a proposta preliminar que aqui é apresentada e que consiste em cinco dimensões de igual importância, nomeadamente, as dimensões: sociais, ambientais, que tomam riscos, governamentais e de investigação, desenvolvimento e inovação (P&D&i), concluindo numa proposta que será seguramente enriquecida na medida em que outros autores propõem alterações ao que aqui é proposto que tornam o modelo menos e menos complexo e mais fácil de implementar.
Ambiente, desarrollo sustentable, desenvolvimento sustentável, environment, gobiernos, governments, governos, harmonic mining, indústria de mineração, industria minera, I+D+i, meio ambiente, mineração harmônica, minería armónica, mining industry, P+D+i, R&D&i, risk-takers, sociedad, sociedade, society, sustainable development, tomadores de riesgos, tomadores de risco.
Citar así/Cite like this/Citação assim: Paulo y Herrero (2021) o (Paulo y Herrero, 2021)
Referenciar así/Reference like this/Referência como esta:
Paulo G. C., A. R. P., Herrero N., J. (Agosto 2021). Preliminary proposal of a model for a holistically harmonious mining industry (2HMI). Geominas 49(85). 83-108.
It is undeniable that humanity has based its evolution on the use of subsoil’s mineral resources, according this coincide Darling (2011), Lèbre et al. (2017), Requejo et al. (2018), Harvey (2019), Salazar & Montero (2019). We do not know how to live without those resources.
The oldest mine, that has news in the world, dates from around 43 thousand years B. C., under UNESCO (2008) has indicated, this mine is found in the Esutini Kingdom (previously known as Swaziland); on the American continent, according to MacDonald et al. (2020), the evidence of the oldest known mining was found in Yucatan Peninsula and dates from around 12,800 years; before this, and for millions of years, there is evidence that mineral resources were used by our ancestors, as indicated, among others, by Foley (1987), Chain (2013), Harrod (2013), Herrero (2014), Vogel et al. (2019), Ubuinvestiga (2020), but, as set out in Earth System (2006) that mining industry began to be relevant between 10 to 7 thousand years ago.
2HMI Model. Preliminary proposal. Disponible en: https://youtu.be/k4HRBCJsYRQ
Casadidio & Pensado (2020) indicated that large-scale mining production has allowed exponential growth over the last 70 years, since it has been able to satisfy strong demand at affordable prices.
Since mining is essential to be able to meet the global goals of an increasingly “green” society it is necessary that mining be also as “green” as possible, which is a challenge that passes, among others, to be incorporated into the global trend of the circular economy. Apply the most quantities of 5 Rs and sign up for circular economy processes from their suppliers, their customers, and society.
Construction aggregates mining, since the world population does not stop growing, is also of great need for society; it is evident that more and more quarries will be necessary, and it is necessary to conceive them as expansion centers, perhaps recreation and/or supply of resources for cities to which they will serve, since, as is known for mineral economic theory, construction aggregates quarries must be very close to cities that will constitute their market since, transport substantially affects the viability of these quarries and, as Harrison and Webb (2021) express, due to the current desire of humanity to minimize carbon emissions, which, in this case, It would be generated by longer transport.
Hund and Reed (2019) mention that experts foresee that, between 2019 and 2050, more minerals than have been produced in the last 100 years will be required.
In a reduction scenario of 2 degrees (2DS), the production of graphite, lithium, and cobalt should be increased significantly by more than 450% by 2050, from levels of 2018, to satisfy the demand for energy storage technologies. Although the demand for some basic minerals, such as aluminum and copper, seems to be lower in percentage terms, their absolute production ciphers are significant, 103 million t and 29 million t, respectively, for 2050.
These projections do not include the associated infrastructure necessary to support the deployment of these technologies (for example, transmission lines) or physical parts (such as the chassis of newly built electric vehicles). Due to the material intensity of low-carbon technologies, any possible scarcity in the supply of minerals could affect the speed and scale at which certain technologies can be implemented worldwide. (Hund et al., 2020).
These projections can be conservative and will probably be higher in a scenario of 1.50 °C, which requires that solutions be implemented faster and on a larger scale. (Hund et al., 2020).
Nolan (2021) mentions that, based on the increase in electric vehicles, it will have to be produced, in the next 25 years, the same amount of copper that has been produced in the last 5,000 years, since electric vehicles consume 3 times more copper than combustion.
The Government of Canada has announced a list of 31 critical minerals for the economic success of Canada and its allies to develop clean technologies. (Webb, 2021).
Sacher (2010) criticized the Canadian mining model by alleging that the mining industry has become abusively enriched from laissez faire of the Canadian Governments, leaving as a consequence irreversible socio-environmental liabilities; on the other hand, he exhibited that the model of that country has led to the concentration of mineral wealth in a few hands while environmental costs have been transferred to the population; additionally, he argued that the Canadian government broadcast its internationally model through financial and diplomatic political support to companies; he continued, showing that the Canadian judicial system has also been supporting companies in such a way that he asserts that companies have impunity; it also notes that in 150 years of mining in that country, an irreparable socio-economic footprint has been caused, hoarding of the great spaces of the country and dispossession of indigenous peoples territories (while the Canadian Government continues to demonstrate having little interest in support these peoples); he affirms that companies, in many cases, have declared bankruptcy leaving environmental liabilities to be repaired by the State; he asserts that the State is somehow an accomplice of companies in the destruction of Boreal Forest, since each year the State gives the companies between 50 thousand and 100 thousand km2 of territory; it also alleges that it is false that companies believe socio-economic benefits since they have not been able to create numerous and stable jobs, rather, the created jobs are dangerous and ephemeral and there are few women or indigenous people occupying the jobs. This author did not make any model proposal to contribute to correct everything he exposed.
Svempa & Sola (2010) carried out criticism of mining extractivist model in Argentina doing parallels with Latin America; they raised, among other aspects, that from the two governments of Menen (1989-1999) established the bases of Argentina Mining Model and that the 1994 Constitution laid the foundations for the Federalization of Natural Resources and established the resignation of the State and regions to the exercise of mining activities with which it was given way to privatization, all of which, continued in the governments of the Kirchner, corresponding to Nestor Kirchner the total value added taxt (VAT) exemption and other strategic points for sector development, while President Cristina Fernandez made use of presidential veto in 2008 to the Law on Protection of Glaciers, asserting the authors as in favor of transnational interest, in specific, in favor of Barrick Gold; authors affirm that companies that perform large-scale mining often concentrate a significant number of activities, competing and subordinate the economy of the place to form export enclaves; authors prevent this type of companies to replace the State and belittle and/or violate citizen decisions; they argue that the implementation of the model is accompanied by repressive and authoritarian policies that criminalize poverty and social protest. In contrast to this Mining Model, the Development Model is questioned and the “Eco-Territorial Giro of Fights” is proposed (the convergence between environmental vision and revaluation of the indigenous community matrix using a language that opposes the eco-efficientist discourse and the developer vision), with which a redefinition of game rules are raised, based on the questioning of development model and the accumulation logic, on the other hand, puts the territorial rights at stake, as opposed to companies interests and the political authorities involved, in such a way, that it is not a dispute around natural resources, but a dispute by the construction of a certain type of territoriality.
Carrasco (2011) proposed, for southern Ecuador mining, that a mining model should be designed that would prioritize the type of mining that has been wanted, where and when do it; a model that would design a strategy to declare Ecuador a country free of open-pit mining and that mining could not be carried out in water sources; additionally, it indicated that there should be a proposal to democratize mining process, which should be based on 4 essential axes oriented towards the socialization of employment, allow the active and protagonist social participation of the inhabitants, develop the local capacities of population and, achieve environmental sustainability.
Garay (2014) proposed a comprehensive mining model as a complex system under basic principles and postulates, among which it has: Mining development must contribute to the socio-ecological ordering of territory to ensure the conservation/resilience of ecosystems based on technical analysis on the combined impacts of different activities on soil and subsoil, as well as on the use of territory under the principles of resilience, integrality, and resistance, and of long-term social, environmental and ecological benefit. Another basic premise is regarding the repeal of the principle inherited from the conquerors “first in time, first in law” which must be replaced by “the highest bidder”, which requires the existence of a rigorous national mining cadaster. Another of the basic principles refers to requiring that the cost-benefit analysis of projects must be positive considering the economic, social, environmental, and cultural aspects. Another basic proposition put forward is the establishment of a mining income in favor of the State that compensates for resource depletion without jeopardizing company profitability, for which it was proposed tax and royalty rates be raised. Another basic proposal is sponsoring linkages with different sectors. Pardo et al. (2014) made a similar but more detailed contribution.
Uribe (2017) took as research axis that Salaverna’s historical relationship with mining allowed the extractivist model, in the neoliberal context, to be established in the common sense of population as a development force idea, which is why strong mining roots persisted despite the harmful impacts that open-pit mining could cause in the community; the author highlighted that “a new geopolitical rearrangement has brought about a re-articulation of the extractive model, further separating the link between community-company and outlining a process with greater repercussions in terms of plunder and exclusion”; additionally, he points out that “government logic moves alongside the business. Mineral wealth is promoted for its exploitation in events that gather a significant number of potential investors”; It also states that “the generation of employment and false value chains are put before it to disguise the true objective based on capital accumulation”, and that government investment attraction agencies “maintain a logic of action proposed from the dominant trend, with a market approach and a logic that characterizes capitalism although nationalism stands out in its speeches.
(1)Social-Environment interaction: This is a bilateral interaction in which the environment possesses the resources required by society to improve its life’s quality, while society must ensure that the ecosystems’ recovery capacity is not exceeded.
(2)Social-“Risk-takers” interaction: This is a two-way interaction in which risk-takers should support the human capital formation and contribute the necessary impulse so that communities can become economically active, during and after the mining industry project to be carried out, at the same time society provides to risk-takers with useful services for their projects. Risk-takers are not responsible for real and continuous life’s quality improvement.
(3)Social-R&D&I interaction: The R&D&i dimension provides society with technical-scientific support to improve interaction with the other dimensions of the model.
(4)Social-Government interaction: The government dimension contributes to society, with the economic resources that belong to it and that it manages on its behalf, everything necessary for society, also with the help of risk-takers, to self-generate real and continuous improvement of their quality of life. Governments are not responsible for achieving society’s real and continuous life’s quality improvement, they should only contribute to society achieving it.
The proposed model is aimed at contributing to real and continuous improvement of human well-being, which, for the effects, of this proposal, can only be achieved if it contributes to promoting equal opportunities for all people to obtain help to improve their levels and quality of studies, improve their practical work skills, improve gross family income so that the other social variables and those mentioned can continue to improve continuously, without the need for external aid, while doing it in an environment every time less negatively impacted by anthropic activities and without exceeding the recovery capacity of ecosystems in such a way that all subsequent generations can make use of the environment to carry out the different activities they require for their well-being.
This model has been conceived for the mining industry and not only for mining, in such a way that, for this proposal, the mining industry is also conformed of the following activities: exploration, preparation, and development, exploitation, concentration, transformation in all its different levels of added value incorporation, recycling, storage, transportation, and commercialization.
Being the most important thing for a nation (society and governments), the greater incorporation of added value to its raw materials, within the national territory as well as R&D&i development with the purpose to increase exportation invoices value every time more.
Many times the financial urgencies of governments contribute to the absence of demands for added value incorporation to raw material, other times, it is due to the absence of policies of real promotion of private investment, foreigners or national, to make value addition in the national territory. Fiscal thirst has been very harmful to the mining industry and society in several countries.
The model is proposed based on 5 balanced dimensions that are completely related to each other, each being of equal importance. These dimensions are social, environmental, risk-takers, government, and R&D&i (research, development, and innovation).
In this proposal, the social dimension aims to prioritize people and their communities, as the main beneficiaries of waters, air, and subsoil mineral resources and, as such, they have the right to grant permits or refuse projects that could negatively affect their lives quality, always, based on proven and globally accepted scientific criteria.
Based on the random and widely dispersed distribution of mineral resources in planet subsoils, since no nation has all the mineral resources it requires, it is necessary to agree that mineral resources present in the subsoil, in any part of the planet, are of humanity's public utility, be in nation subsoil where be, therefore, irrationally refusing to produce them is harmful.
On the other hand, it is also not appropriate that, for the sake of obtaining subsoil’s mineral resources, socio-environmental damage be caused to the countries in which they occur, in exchange for trinkets and illusions of prosperity, that normally no sustainable progress produces, in such a way that the interest of society, of governments, of States, and should be of humanity, would be that mining industry projects be not initiated if they are not part of larger projects in which real minimization of impacts on the nation and, such projects contribute to real and continuous life’s quality improvement in them.
The mere generation of economic dynamism cannot continue to be enough. The already classic “not in my backyard” (NIMBY) that is handled in many nations regarding mining, since there is no real way to eliminate it from our lives because we have no way to replace it, has to result in real benefits for nations that do not materialize the NIMBY and continue to contribute to the production of such important resources.
It is logical to foresee that due to what is proposed in this model, there would be a reduction in the number of new viable projects which will surely impact the markets: reduction of supply, and price increase, among others, but it is up to planetary society to evaluate, ethically, the need for resources and the benefits that a few people obtain versus damages that most members of humanity would be receiving, it is also necessary to put in the balance the option of society being strongly opposed to the mining industry in their countries.
Few projects are always better than none. It is easier to demonstrate to the population of a country that certain projects can be holistically harmonious than to demonstrate, seriously and reliably, that typical “avalanches” of new projects are going to mean something different to society than what they have always resulted in different nations.
As Joyce and Thomson (2000) put it, both companies and governments need to realize that it is not possible to realize mining projects with the sole approval of the State while communities are against it. But it is necessary to complement the assertion of these authors because it is also not possible to allow communities to be against such projects just because they are against them or because they are an instrument of political interests, extortion or destabilization, of political factions or fanatical and mercenary environmental organizations, whether they are internationally renowned or not.
It must be understood that many of the populations in the world are uninformed and/or ignorant in technical aspects so they are easily manipulated by malicious or fanatical factors.
The social management of mining companies, rather than aiming to allocate a few resources to make donations, take photos, and make a lot of propaganda, should be oriented to contribute to the real and continuous improvement of the quality of life of the population so that this management requires determining how to contribute to the generation of the best and greatest possible positive impact, with the available resources so that the population can be economically active during and after mining activities so that quite possibly the main objective of mining business social management would be aimed at contributing with the training and improvement of skills so that the population can “put their two cents” to the generation of the gross domestic product of their nation.
It should be noted that the social management of the companies that make up the mining industry is not responsible for the achievement of the real and continuous improvement of society, simply they contribute to its achievement; each society is responsible for the achievement of its real and continuous improvement.
The “Social License to Operate” (SLO) was an excellent idea to empower the society that receives the positive and negative impacts of the mining industry, however, adjustments are required that are partly exposed by Casadidio and Pensado (2020).
Since Jim Cooney coined the term “social license to operate” in 1997, as revealed by Thompson and Boutilier (2011), among other authors, the term has been quite analyzed by different essayists, among which we have Joyce and Thomson (2000), Bice (2014), Moffa and Zhang (2014), Owen and Kemp (2013), Pullchz (2018).
According to Boutilier (2014), the contemporary use of the term “social license to operate” contemplates that communities have as much right to grant permits on their resources as governments have, with which Arienza (2021) agrees.
Casadidio and Pensado (2020) have proposed that the SLO should evolve towards the “Social Contract” and propose that such a contract should be the product of dialogue between communities and companies, with the State being a guardian of the process. In addition, they point out that the contract must be based on the principles of equality, non-discrimination, participation, and transparency on the part of both the community and the company. They must negotiate in a win-win style.
On the other hand, they state that the contract must contemplate the option of being renegotiated, by mutual agreement, to adapt it to the realities that arise over time and that are normal in projects as long-term as they usually are, those of the mining industry.
Corporations in the mining industry have been contributing to the social dimension within the framework of corporate social responsibility or in other frameworks specific to each corporation. Among other examples are:
Mining companies in Peru carried out 179 actions within the framework of 4 Sustainable Development Goals (SDGs) of United Nations: Health and Well-being (SDG 3); Quality education (SDG 4); Industry, Innovation and Infrastructure (SDG 9) and Partnerships to achieve the goals (SDG 17); of those 179, 135 actions were aimed at directly attacking the pandemic, while 30 were aimed at economic support for communities and 14 for education, such as distance education. (El Comercio, 2020)
24 mining companies in the gold sector have been making efforts in different countries in favor of the SDGs. (WGC, 2020).
In 2019, the mining-steelmaker group Metinvest continued to work with the development funds of Mariupol, Kryvyi Rih, and Zaporizhia having invested in social partnership projects to improve the quality of life of residents and increase the attractiveness of the cities where its steel plants are located in Ukraine and abroad. Additionally, the group has invested in fighting the COVID-19 pandemic purchasing medication and equipment for Ukrainian medical professionals, installing oxygen stations in hospitals in Mariupol, and financing the delivery of humanitarian aid to Ukraine. (Metinvest, 2020).
Vale mining company has a project called Horizonte that is applied in mining municipalities and is aimed at supporting business models with purpose, with the idea of increasing the capacity of people and organizations to innovate so that they generate positive social and environmental impacts throughout the region in which they are located. (Brazil Mineral, 2021).
Aceros Arequipa was awarded for 3 consecutive years with the distinction of Socially Responsible Company (DESR, Spanish acronym) awarded by “Peru 2021” and the Mexican Center for Philanthropy (CEMEFI, Spanish acronym); they also obtained in 2020, the recognition “Carbon Footprint Peru” Level 1, granted by the Ministry of the Environment of Peru. This company has a program of university scholarships that they have been granting since 2019, the scholarship covers costs of accommodation, transport, and food, for the total duration of the career and is aimed at high-performance students from the area of influence of the company, they have also been making donations to health centers in their area of influence and medical campaigns and donation of medicines in different districts of Peru. (Aceros Arequipa, 2021).
It is proposed as part of the model that both the environmental studies required by current legislation, as well as the mine closure plan, the operations design, and production plans should be part of a Comprehensive Continuous Production Plan (2C2P) for the area in which the mining industry project is intended to be carried out.
This plan will be oriented in everything that will be carried out, from the first day, in favor of the economic activity or activities that will replace the project once completed, or before, if the coexistence of economic activities in the same area is possible. Hence, 2C2P will be part of the agreements that will be negotiated by communities and risk-takers.
The 2C2P must be framed within the territorial planning in force for the area and must be prepared in agreement with the community or communities located in the territory of the mining industry project if any, otherwise, the 2C2P must be registered in the local, regional or national development plan planned for that sub-basin, if any. It should be noted that Harrison and Webb (2021) also discussed the importance of communities being involved in the planning process of what will be done in the area after the project is completed.
The purpose of the 2C2P is that the mining industry project that will be carried out acts as a lever for the socio-economic sustainability of the communities in harmony with the environment, in such a way that the transit over time, of the mining-metallurgical-metalworking sector, through the area, will contribute to communities lifes’ quality being higher than what they had before the realization of the project, without ruling out that a project of the mining industry could be the basis of other projects of the same industry creating a continuity over time.
It is therefore required that the community grant a Community Mining Authorization (CMA), which, once issued, will demonstrate that the community has negotiated with the risk-takers and has reached agreements regarding what leads to establishing the bases so that later, and even in parallel, to the activities of the mining industry that will be carried out in the area, there will be economic continuity, being clear that the risk-takers are not responsible for the continuity of economic activities but contributes to them, by common agreement and to community satisfaction.
[Vídeo] Peñoles y su programa de desarrollo de habilidades docentes. https://ganar-ganar.mx/2020/04/14/penoles-y-su-programa-de-desarrollo-de-habilidades-docentes/
[Vídeo Reporte Minero] Licencia Social Para Operar: Crecimiento sostenible en minería. https://www.facebook.com/reporteminero/videos/243888340366616/
CMA issuance will take place once the 2C2P contains, to the community's satisfaction, what will lead to area economic continuity, while the Mining Community Contract (M2C) has been signed, inspired by the above-described SLO and the Social Contract.
The CMA, the M2C, and the guidelines for the socio-economic sustainability of the 2C2P should be prerequisites for the initiation of legal procedures for obtaining mining rights before the government agency with competence in mining, leaving to approval, by the government agencies, the technical projects that are part of the 2C2P.
The M2C will be a bilateral contract that should be made public in the relevant office, on the other hand, the contract should be disclosed, without any limit; at least, it should be widely accessible by electronic means, both from mining competent institution and from the community and risk-takers.
All M2C should contemplate the possibility of being modified after negotiation when the variables that have been initially considered have changed, since it should be borne in mind that the normal thing in the mining industry are the horizons of long times (20 or more years), for example, in the case of metallurgical and metalworking companies and their equivalents, there are companies that have been operating for hundreds of years as shown by Mining Technology (2019a); in the case of industry extractive activities, mine’s life can be increased, due to, among other causes to: increase in reserves due to new discoveries or technological evolution that allows to profitably take advantage of what was not previously commercial, decrease in market consumption that does not affect the financial feasibility, it is also possible close mine, temporarily or permanently, ahead of schedule, for the reasons indicated by Oyarzún (2008), namely: depletion in reserves, fall in demand or prices, mismanagement, environmental restrictions, changes in the legal rules of the game, labor disputes or other force majeure.
M2Cs should have clearly established the causes that would lead to the loss of the CMA.
(1)Environment-Social interaction: This is a bilateral interaction in which the environment possesses the resources required by society to improve its life's quality, while society must ensure that the ecosystems' recovery capacity is not exceeded.
(2)Environment-R&D&I interaction: The dimension of I&D&i is fundamental support for the minimization of environmental impacts, in such a way that anthropic activities can be carried out with the minimum possible damage.
(3)Environment-“Risk-takers” interaction: This is a bilateral interaction in which the environment possesses the resources required by society and which mining industry can extract, process, and transform to contribute to improving society's life's quality, while risk-takers must ensure that the ecosystems' recovery capacity is not exceeded and that every time impacts be less.
(4)Environment-Government interaction: The dimension of government must ensure that the anthropic activities carried out in its national territory be made with more efforts to minimize the impacts while guarding, ecosystems' recovery capacity is not exceeded.
It should be borne in mind that anthropic activities are impactful on the environment per se. Of course, the mining industry is a set of anthropic activities, as are also: tourism, agriculture, and manufacturing industry, among others.
Considering the data presented by IMF (2021), ICMM (2020), and UNDP (2020), and using the methodology set out by Gómez (2007) to determine which are the developed countries, it is that, except Australia, the developed countries are not dependent on the production and export of inorganic mineral resources.
Is in underdeveloped countries such as Mongolia, Suriname, the Democratic Republic of the Congo, Belize, Guyana, Mauritania, Zambia, Papua New Guinea, Sudan, Chile, Kyrgyz Republic, Guinea, Burkina Faso, Liberia, Peru, Mali, Uzbekistan, Togo, Armenia, Ghana, and Lao People’s Republic, where mining income as a percentage of gross domestic product is between 5% and 28.9%, on the other hand, Pietrobelli and Calzada (2018), noted that by 2015, the mining sector represented “21%, 60% and 46% of the total exports of Peru, Chile, and Brazil, respectively.”
Now, these countries and others of a similar or lesser level of underdevelopment, possessing valuable mineral resources, while possessing great socio-economic and political needs, are the most likely to do whatever it takes to make the mineral resources in their subsoils exploit trying to obtain short-term dividends, losing sight of the bright future that the nation could have in the medium and long term if things are done within mind that impacts on environment must be minimized while generating the maximum possible citizen's life quality and without losing sight, the fact that, the mere export of primary resources and acquisition of technologies for industrial processes, does not produce development, all this is aggravated when the absence of sensitization and awareness are part of politicians and entrepreneurs who agree to joint their needs of the economic type above any other relevant variables.
Svampa and Sola (2010), stated that there were indications that in the coming years, Central America would see a marked increase in mining investment and that the process had already begun in Guatemala and Honduras.
Mascarenhas et al. (2019) point out that Chile produces 34% of the world’s lithium, the Democratic Republic of Congo 60% of cobalt, Russia 18% of nickel, China 70% of graphite, 56% of magnesium, 97% of rare earth, 58% of indium, 72% of germanium and 83% of gallium, Brazil 92% of niobium, 17% and 14% of silver are produced by Peru and Mexico, respectively, and South Africa produces 79% of the platinum group minerals, all of these minerals required to achieve the reduction of humanity’s carbon footprint.
According to Hund and Reed (2019), for that year, there were about 1,500 mines in tropical forests while about 1,800 were under development or out of service, and more than half of these are located in lower- and lower-middle-income countries. Highlighting that mining is responsible for 7% of the total forest loss.
Howard, J. (co-founder of Fasken’s hydrogen energy advisory team BMO?) quoted by Creamer (2021) asserts that mining is responsible for 4% to 7% of global greenhouse gas (GHG) emissions, with 1% of that total coming from Scope 1 and Scope 2 carbon emissions from mining operations and energy consumption.
It is clear that the demand for mineral resources if we insist on carrying it out in the way it has been done, represents a danger to the survival of humanity since humanity is not viable in the scenarios of environmental deterioration envisaged in the medium term and the mining industry, currently, is a major contributor to those scenarios envisaged.
It is therefore required that companies in the mining industry focus, even as a survival strategy in the markets, on being increasingly “green” (green according to the definition set out by Kirkey cited by Davies (2014)[1]), on reducing the ecological footprint, and on incorporating themselves into circular economy processes.
Awareness and sensitization about the environment are not widely disseminated among decision-makers and shareholders of firms in the mining industry, but it has been increasing, observing efforts to minimize impacts that go beyond what is contemplated in national laws. Some governments have also taken action over rhetoric and there are increasing research contributions to minimize environmental impacts generated by the mining industry.
Lewis et al. (2016) argue that many mining companies have been working towards the Sustainable Development Goals (SDG) and that the United Nations (UN) and national governments have been designing dialogues on how to advance the SDG agenda with mining and other sectors.
Deloitte LLP (2017) explained that at the end of 2016, Vale mining company started the Eliezer Batista S11D project which has mine, plant, railway, and logistics station, designed to reduce environmental impact in the following way: reduction of logging by 40% when located in an area that had already been deforested, reduction of fuel by 70%, as well as the reduction of waste from used tires, oil filters, and lubricants, all this due to the use of mobile excavators and crushers, reduction of water consumption by 93% thanks to the fact that the mineral is being processed with the natural humidity it has and saving 18,000 MW/year of electricity.
Gerdau steel company within its recycling project helps to legalize and increase the income of waste collectors from the places where it operates, on the other hand, it manages to recycle 14 million tons of metal remains per year which become products of improved quality contributing to the improvement of its employees´ life quality and being friendly to the environment. (Deloitte LLP, 2017).
BHP mining corporation has created in 2019 a program for climate investment, of 400 million US dollars over 5 years, to reduce the emissions generated by its operations and those generated by the use of its resources. It seeks to encourage the reduction of scope 3[2] emissions and scope 1 and 2 emissions in the medium term, which is in addition to the corporation’s goal of reducing emissions by 2022 to 2017 levels and in the long term (mid-century) achieving net-zero emissions. (BHP, 2019).
The first delivery of aluminum produced without carbon emissions (CO2) has already been made thanks to technology developed by Elysis which is a partnership between two large companies in the global mining business, Alcoa and Rio Tinto, with technological and financial support from Apple and partial financial support from Canada and Quebec governments. (Digital Economy, 2019, Mining Technology, 2019b and elysis.com, 2021).
Mining.com (2021) states that the Canadian company Magna Mining will support the Niagara Escarpment Forest Carbon Project, which promotes and maintains the function and diversity of ecosystems along the Ontario Niagara Escarpment, which it will finance by purchasing offset credits for all greenhouse gas emissions produced during a year, thereby achieving carbon neutrality in 2021.
Calderón (2020) points out that, currently, in mining, the following efforts are made for reuse and recycling. Ndlovu et al. (2017) agree with this:
· Tailings rich in sand, mixed with cement, used as a filler in underground mines (hydraulic fillings).
· Tailings are rich in clay, as an amendment to sandy soils and for the manufacture of bricks, cement, tiles, toilets, and porcelains.
· Reprocessing of tailings to obtain metals of economic interest.
In addition, research efforts are made to:
· Tailings are rich in manganese (Mn), to be used in agroforestry, building materials, coatings, glass, ceramics, and enamels.
· Bauxite tailings as alum sources.
· Copper-rich tailings (Cu), such as extenders for paints.
· Tailings are rich in iron (Fe), mixed with ashes and sewage sludge for the production of light ceramics.
· Energy recovery from compost mixtures and coal tailings.
· Tailings are rich in phlogopite, for wastewater treatment.
· Phosphate-rich tailings (PO4³-), for the extraction of phosphoric acid.
· Ultra-tailings for glass production.
CSIRO Chile, ENGIE, and Mining3 were working on Hydra project in Chile which is estimated to require an investment of 1,200 million Chilean pesos to convert mining vehicles from various mining sites in Chile but the broader vision is to help Chile become a producer and exporter of green hydrogen, which is why the Chilean Production Development Corporation (CORFO) contributes 252 million Chilean pesos. (Moore, 2020).
Anglo American and Williams Advanced Engineering teamed up to develop the world’s largest hydrogen-powered haulage truck. (WAE, 2020).
Barmer Lignite Mining Company Limited supplies lignite to Raj West Power Limited, which is a 1,050 MW thermal power plant that, apart from receiving the lignite, is receiving 25,000 m3/d of wastewater generated by the mine, which is treated by reverse osmosis, a process in which the residual water that has between 20,000 to 25,000 ppm of solids is reduced to between 2,000 and 250 ppm, which is the same as the freshwater that had been received; through this system, the thermoelectric plant reduces the water it needs to capture by 18%. (JSW Energy, 2021).
In Chile, the recycling of 25% of tires and the collection of 50% will begin by law from 2023, raising this percentage to 100%, in the case of mining companies, from 2030. Decrees are expected to be issued soon establishing similar obligations about batteries, lubricants, packaging, batteries, and electrical goods, among others. (Fajardo, 2021).
Regarding this Chilean initiative, Ferrada, who is the sustainability manager of Anglo-American Chagres Foundry, cited by Guía Minera de Chile (2021), reveals the mining industry’s duty to be by expressing that the industry is called upon to be more agile and faster in adapting to the circular economy than what the REP law indicates, being especially relevant his assessment that the circular economy should be included from engineering, ceasing to see processes as linear with inputs and outputs and seeing them as cycles.
In Peru, based on Supreme Decree No. 003-2020-PRODUCE, the roadmap towards a circular economy in the industrial sector was established.
According to Mining Weekly (2021) citing Reuters, by the end of 2020, in China, steel mills totaling around 620 million tons had been converted to ultra-low emissions. China’s Five-Year Plan 2021-2025 commits to green transformation for the steel sector, aiming at transforming the installed production capacity of 530 million tons of steel with ultra-low emissions, and clean production into installed production capacities of 850 million tons of cement and 460 million tons of coke.
According to Stuart, A. T. (Executive Chairman of Hydrogen Optimized) quoted by Creamer (2021) carbon can be removed from mining by generating “green” hydrogen, which can be produced in any mine anywhere on the planet, thus having “green” mines that can supply “green” minerals to industries that want to place “green” products on the markets.
Anglo-American, BHP, Fortescue, and Hatch have formed the Green Hydrogen Consortium, to accelerate decarbonization in their operations around the world. (Brightmore, 2021a).
Anglo-American has secured the start of iron ore and nickel production operations in Brazil, with fully renewable energy, from 2022 and for its copper operations in Chile, from 2021, and now, it has signed an agreement with Engie Energía Peru to provide 100% renewable energy for copper operation in Peru called Quellaveco, which is expected to begin production in 2022. (Brightmore, 2021b).
Efforts have been made in applied scientific research aimed at using, reusing, recycling, etc., mining waste in its different forms, such as
Duarte et al. (1990) have proposed that bioleaching by thermophilic bacteria be used for metal recovery combined with the application of sulfate-reducing bacteria for the remediation of solutions to be released into the environment.
Tabak and Govind (2004) developed a polypropylene hollow fiber membrane bioreactor system for the treatment of acid water from Berkeley Pit mine, Butte, MT, using hydrogen-consuming SRB biofilms. They obtained pilot-scale data indicating that this technology can be applied to the biotreatment of acid mine drains on a field scale and for the recovery of high-purity metals and water usable in agriculture.
Hargreaves et al. (2012) conducted a study on acidic tailings containing nickel and copper, belonging to Vale in Sudbury, Ontario, Canada, demonstrating that placing an organic waste cover on mine tailings to support the growth of bioenergy crops is a potential novel recovery strategy for the mining and smelting industry, or for abandoned industrial areas in general.
Dharma and Ikhsan (2016) conducted research to demonstrate the power generation capacity of acid mine drains. The research was conducted at PT. Bukit Asam (Persero), Tbk., and demonstrated that 500 ml of acid mine drainage could power a 1.5-watt LED diode bulb for 30 continuous days without interruptions, so for a year 6 liters of solution without any prior treatment would be required.
Banks et al. (2019) installed pilot heat pump systems at two former coal mines in Yorkshire/Derbyshire, England, to extract heat from mine water: they made 3 configurations of which proved to be the most efficient, the one in which a heat exchanger is immersed in a closed-circuit mine water treatment pond, being able to run at any time, without obstruction problems, regardless of the mine’s pumping regime.
Castelo-Branco et al. (2019) used mining residues rich in pyrite to apply it to calcareous soils obtaining a greater availability of trace elements, an increase in nutritional parameters, and an increase in the production of dry matter, all this, without causing problems of contamination in surface waters or toxicological problems in grazing animals.
Bortnikova et al. (2020) worked on cyanide leaching tailings possessing very high levels of cyanide (4 g/l) and metals from Berikul gold mining plant, Siberia, Russia, determining that none of the reagents they used work on their own and recommending the use of NaOH with Na2S and then Ca(OH)2 for further neutralization.
Mehta et al. (2020) investigated the potential for reuse of extracting waste present at an abandoned mining site in Gorno. Based on the experiments carried out, they proposed that tailings be used as a soil additive with the addition of fertilizers and soil amendments, while, for the recovery of metals from sterile rock samples, flotation should be used as the preferred separation method. Finally, they highlighted that extractive waste should be considered as mineral bodies to be exploited and that raw materials extraction from them can lead to area rehabilitation reducing environmental impacts.
Ruiz (2021) explains that researchers at Aalto University in Finland have developed a new mechanism to process minerals in a more environmentally friendly way compared to current foam flotation mechanisms, using a cellulose-based compound that is not only renewable, biodegradable, and non-toxic but it also more effective at separating metals than the commercial oil-based foamers that are commonly used.
Despite all the above, there is still much that the mining industry must change to be increasingly respectful of the environment, for example, action must be taken in everything related to water management, putting into practice the principle that water that is returned to the environment must be at least of the same quality as that obtained from it, and containment measures must be implemented to prevent spills from reaching the environment in the face of spills of tailings dams. It is already known that they can suffer mishaps, ok! it is time to take action with measures that are foreseen for the eventuality of such mishaps. If the operation is not profitable with measures to prevent the waters from being impacted, then why do the citizens of a country and the totality of humanity want operations of this kind to be allowed?
In environmental matters, this proposal supports everything conducive to the prevention and/or real and continuous minimization of environmental impacts generated by the mining industry, condemning the constant attacks that environmental fanatics and mercenaries carry out against the industry for extortion.
[1] “green mining is defined as mining technologies, best practices and processes that are implemented as a means to reduce the environmental impacts associated with extraction, and processing...”
[2] These are all indirect emissions (not included in scope 2) that occur in the reporting company’s value chain, including both “upstream” and “downstream” emissions. Scope 2: Indirect emissions from purchased power generation. Scope 1: Direct emissions from owned or controlled sources. (Farsan et al., 2018).
In this model proposal, governments have the role of “Orchestra Director”, not performers. Governments are ruled by political-partisan criteria, which are usually incompatible with the role of “State-entrepreneur”, which leads to inefficiencies that end up being paid, sooner or later, the environment and society, the latter being, in the speeches, the main beneficiary of the State-entrepreneur.
Exercising the “Orchestra Director” role is already an important job for a country’s citizens; this exercise requires ethics, technical preparation, and consistency. The simile of the government’s role in the mining industry and orchestra directors has not been chosen at random.
The mining industry is one of the riskiest in the world. It is not appropriate for governments to dispose of nation’s resources, which in any situation will always be (scarce, to risk them in activities that are priorities to be able to have a holistically harmonious mining industry.
The riskiest of all mining industry activities is geological exploration which has a very low success rate, as also exposed, among others, Rose and Eggert (1984), Oyarzun (2011), Koch (2015), Regueiro and Espi (2019), and this activity is the basis of mining industry; to pretend a mining industry without detailed geological knowledge is an attack against society, environment, and economy.
In some cases, it could be justified for a government to be a mining entrepreneur, preferably as a partner, when it is desired to promote or incentivize or initiate mining industry activities that are really necessary for the economy and that the private sector has not shown interest in undertaking, but the best thing for public finances is that when will there be private stakeholders, the state should sell and go out of business.
Governments must define the sites where it is possible to carry out activities of the mining industry, based on the planning of the territory and if this does not exist based on the really measured environmental sensitivity. It is truly important not to receive applications for mining rights in areas that have not previously been established as acceptable to carry out the activities of this industry.
The mining industry is excellent for increasing investment in a country, increasing tax revenues, increasing foreign exchange, increasing exports, boosting the economy in remote places, and perhaps the poor in the country, increasing access to more and different markets. In the world, improving access to technologies, and well managed, can lead to improvements in the creation of technologies and innovation and, to be one of the levers to diversify and increase the value of exports.
The mining industry contributes to the increase and improvement of the employment of all production factors, however, regarding the labor production factor, it is true what CONOCER (2010) pointed out, who stated that the mining sector contributes little to the generation of employment but that mining industry services subsector does largely generate them.
In contrast to what is indicated in the two previous paragraphs, according to Marroquín (2014), Aliaga (2015), and Azamar (2018), mining contributes little to economic growth and development.
A very significant role of governments is to collect and generate basic information for the mining industry, make public existing information that has not been classified as strategic for the security and defense of the nation, and invest in the deepening of regional geoscientific knowledge.
(1)“Risk-takers”-Social interaction: This is a two-way interaction in which risk-takers should support the human capital formation and contribute the necessary impulse so that communities can become economically active, during and after the mining industry project to be carried out, at the same time society provides to risk-takers with useful services for their projects. Risk-takers are not responsible for real and continuous life’s quality improvement.
(2)“Risk-takers”-R&D&I interaction: Bilateral interaction where risk-takers must invest important quantities of resources to deepen knowledge and get improve about processes, and technologies, and about find more and better uses of their products, and on reducing impacts on society and environment.
(3)“Risk-takers”-Environment interaction: This is a bilateral interaction in which the environment possesses the resources required by society and which mining industry can extract, process, and transform to contribute to improving society's life quality, while risk-takers must ensure that the ecosystems' recovery capacity is not exceeded and that every time impacts be less.
(4)“Risk-takers”-Government interaction: Two-way interaction in which government must offer the most clarity play rules concerning risk-takers performance into national territory understanding risk-takers need to invest big quantities of resources and assume enormous risks to be able to produce, sell, get incomes and only then generate real wealth. Resources that have not been produced are not wealth. The government never should forget risk-takers can invest their resources in another country with more favorable conditions, by the other hand, risk-takers must respect and obey the country’s law and work together to improve society’s life quality and mining industry taking care of the environment without whose care, is not possible to get true life’s quality.
A very important role of governments is to attract investments, but for this, it is not enough to create some agency (or ministry, for those who are more irresponsible with public finances), it is necessary to make significant transformations throughout the state apparatus aimed at legal certainty so that the State has transparent conduct and solidity and stability of its institutions, to reduce the excessive discretion of public officials, to make the procedures for conducting business in the country more efficient and easier, to develop and promote, within the national territory, the maximum possible quality competitive advantages. About these transformations, the following authors have written totally or partially: Te Velde (2001), Guj (2012), Arroyo (2014), Herrera (2017), among others.
To achieve investment in the mining industry, it is necessary to give the lie to the myth that mining is equals money, without more. In reality, the mining industry can be very positive for economies, but it requires a lot of investment, sacrifices, special conditions, and time so that it can be really positive for humanity, meaning, “really positive” the holistically harmonious mining industry and, not the one that abounds today.
To produce or increase investments in the mining industry, it is necessary to:
• Reduction of production and income tax rates. Taxes should be lower for projects that include the greatest amount of value-added to raw material within the national territory. Of course, the export of raw materials should have the highest tax rates in the country.
• Elimination of import taxes on technologies and inputs that are not produced in the country, or that are more efficient, or which generate fewer impacts on the environment.
• Fiscal stability (national, regional, and local), during project life, based on conditions used to make feasibility calculations. Since it is customary that when there are substantial price increases governments create new taxes to try to obtain more revenue and since there are plenty of examples of exaggerations and bad criteria in the definition of such increases or the creation of new taxes, then a scale of tax variations should be predefined in case of substantial price increases or decreases as a result of the interaction of market variables so that when risk-takers make their financial calculations they can make the necessary simulations that allow them to know the implications of these tax scales to make investment decisions without the high statistical dispersion generated by the discretion of public officials.
• Successful performance to reduce inflation.
• Preferably, to have an economically growing economy.
• Minimization of political and economic risks.
• Legal guarantees for capital repatriation.
• Successful performance in controlling public spending. Having high public spending could indicate that there will be tax increases in the future; a disproportionately rising public debt could indicate the need for tax increases later on.
• Countries in which unjust expropriations, confiscations, or nationalizations have been implemented should establish legal guarantees not to engage in such despotism again on pain of compensating for the consequences.
These aspects coincide totally or partially: Guj (2012), Arroyo (2014), Gil et al. (2013), Herrera (2017).
A State that intends to attract investments towards mining industry should not contemplate in its legislation the free reversal of assets for production in mining industry, on the other hand, the reversal of assets necessary for production could be justified in cases where the holders of mining rights, for whatever reason, have no interest in continuing with production activities, or when they incur expiration causes, and any of these causes occurs at the time that there are proven mineable mineral reserves with profitability, in such a way that, in order to preserve the use of production factors and avoid the decline in economic dynamization that was generated with the activity, the reversal is established, but it should only operate through fair payment of assets that are technically evaluated as suitable for continue with production, the rest of assets should be kept by their owners and extracted from the areas where the mining right has been granted and disposed properly, in such a way that they do not represent environmental liabilities.
Eventually, it may be necessary for the State to temporarily exercise direction of operations while transferring control to a private sector stakeholder through the existing legal channels in the country, but it may also be the case that there is interest on the part of legally qualified entrepreneurs and the operations continue directly from the hand of the private sector, being logical that, in the first case, it is the State who pays for assets values that are reverted and, in the second case, those who assume control by the private sector.
The existence in the laws, of assets free reversion, is generating discomfort in potential investors, some may distance themselves, and others may not make possible decisions of renewal of production assets by others more efficient and less impactful of environment if the decision had to be taken few years before the completion of operations since for reversal effects, they could not recover the investment of such assets and/or not being able to materialize rescue values, among other aspects that can financially affect the business.
On the other hand, the free reversal of all assets, in practice, simply makes the state possessing scrap metal and infrastructure that it cannot maintain and that will probably become garbage at distant sites in which they operated and will impact the environment.
On the reversal of production assets for mining have written, among other authors: Brewer (1990) and Barrera (2017).
It is required that the organism with competence in the mining industry has a unit of attraction and support to investors that is responsible for simplifying and shortening the duration of procedures as well as any procedure with institutions of central, regional, and local governments (single box office), as well as that, can facilitate access and make known to investors about the spectrum of possible suppliers of goods and existing services within the national territory, as well as the various competitive advantages available in the country. The work of such an office should accompany each investor during the duration of their operations in the country.
It does not contribute to attracting investment, apart from showing a country as unserious and even as a “fraudster country” or “investment trap”, the fact that there is no coherence between State institutions; cases where a State agency grants a mining right in an area, and another agency of the same State has subsequently granted or confers another right for another incompatible activity on the same area or part thereof or one of the other governmental institutions prevents or attempts to prevent, based on the law, or not, the exercise of the mining right granted causes economic damage to those who obtained the rights but at the same time damages the image of the country and drives away possible investments.
UNCTAD (2020) argues that, in 2019, 54 economies introduced measures aimed at liberalization, promotion, and facilitation of foreign investment for the mining sector, among others, with developing countries and emerging Asian economies being the most active in these changes. Several countries simplified administrative procedures for investment or expanded incentive schemes.
Agencies that are in charge of government’s mining management should be a professional organism and not of clientelism, oriented to the search for excellence for which it is necessary that, to enter the organism a public competition of opposition must be made and every 4 years from the moment in which the position is occupied, it should be resubmitted to similar competition, to give opportunities for people with better preparation, if it were the case, apply to positions and to drive the institution towards the perennial search for excellence; to qualify for promotions it should also compete.
It is very common in undeveloped countries, which is where more mining is done and for which mining is more important, in economic terms, that formal education, both technical and university, is deficient and with a large gap between what is learned and the requirements of the production and service industries, in such a way that it is required that governments in conjunction with companies in mining industry and international organizations, carry out programs of the type “finishing schools” that allow a reconversion of knowledge and skills in national talents, instead of being replaced by foreigners, but not preventing foreigners work because it is enriching for nation’s labor mass, unwind with foreign workers of proven skills and knowledge.
It is crucial in this model the improvement of human capital and research, development, and innovation, in this coincides Indacochea (2001) and EY (2020) because for the mining industry to be holistically harmonious requires a lot of investment in these aspects so that finishing schools must have a component that allows the training institutions of middle-level technicians, university technicians, and university professionals also adapt to the most modern requirements of today so that they do not continue to produce professionals isolated from real requirements of labor markets.
About this modality of finishing schools have written, among others: Caputo (2012), García & Bafundo (2014), Rozemberg & Gayá (2019).
Impatient governments in need of capital, both for national accounts and for corruption, have been largely to blame for deplorable mining and pseudo-mining exercises, which have been used as the image of an entire sector, in which different actors have spent decades making efforts to do things right. Wanting mining to be a lifeline for a country’s economy places a burden on the sector that it should not have if what it wants is a harmonious performance of the mining industry.
When governments become stubborn in attracting investments in the mining sector, try to have as many investors and projects running and pass into the background, aspects of great relevance such as social and environmental, it must be understood that in the mining sector, given the potential for social and environmental destruction that the industry has, the best thing is to have few projects of real quality than to try to break records of the number of projects, records of investments captured, records of export of minerals in the primary state, records of income to public treasury from the mining industry and more of the same that has always characterized the nations of traditionally weak economies and politicians of great socio-political immaturity.
Of the world’s largest producers of raw materials, the CARBS (Canada, Australia, Russia, Brazil, and South Africa), only the first two have obtained development based on mining, but they are not sustained as developed countries by the mere production of raw materials, but because they are increasing the value added to their raw materials and also the one that comes from other countries, all this within the national territory, while better investing the resources they obtain intending to improve their population’s life quality.
There must be a main interest in contributing to the process of supplying minerals necessary for underpinning the improvement of humanity’s life quality, but it is necessary:
• Raise the income from what is exported,
• Improve the levels of preparation of nationals who are part of themining industry that develops in the territory,
• Raise national R&D&I and promote the production and marketing of products and services derived from R&D&I processes.
Concerning decentralization, in this proposal, the points made by Williams (2010), Arguedas et al. (2011), Venugopal (2014), and Alfirdaus (2019) have been partially considered.
This proposed model provides for the possibility of decentralization unless the country has a small geographical area, but it is not a good thing to proceed with decentralization without preparation, so it is proposed that it should be carried out in stages.
The first stage should correspond to a centralist model exercised by the central government with deconcentration towards regions covering several states or provinces about the mining of metal ore production and concurrently with states or provinces governments concerning non-metallic mining that will not be used to produce metals, it should be noted that mining of precious and semi-precious non-metallic would also be administered concurrently with states or provinces; it should be noted that central government must adapt regions’ deconcentrated offices so that various procedures that are contemplated in the legislation that is in force can be carried out from these offices.
In the second stage, the central government would continue with the same powers as the first stage, but decentralize, at the request of states or provinces, the administration of the powers they concurrently exercised in the field of non-metallic minerals.
In the third stage, the administration of metals mining would be operated, concurrently between the states or provinces together with the central government and both concurrently with mining districts that have been defined by geological exploration during the first and second stages, while the states or provinces administer concurrently with the municipalities or local governments, upon request, the non-metallic mining.
In the next stage, the exercise of metal mining administration would be decentralized to the states or provinces, that request it and have previous experience of concurrent administration with the central government, this decentralization would be exercised concurrently with the mining districts and the administration of non-metallic minerals would be decentralized to the municipalities or local governments that request it and have worked concurrently with the states in the administration of these resources.
In the final stage, the governments of states or provinces obtain the total decentralization of metal ore mining without concurrence.
Rosa Balcazar: Gobierno promueve sistema de proveedores de la minería que sea sostenible. https://www.youtube.com/watch?v=gRVBUsy7Uh8
During all stages, the central government would define mining policy for the entire nation and administer the rest of the activities of the mining industry, except for preparation and development, except in the periods in which it is administrator, i.e. the activities of the mining industry, such as exploration, transformation, transport, storage, recycling, and trading, will be under the control of the central government, except when the projects presented to the states or provinces and municipalities or local governments contemplate the activities of transport, storage and/or recycling.
It should be established in the laws, which are made to regulate the decentralization of the mining sector, that in none of the matters related to the mining industry, neither states nor provinces nor municipalities, or local governments, may detract from what has been established in national legislation and much less establish rules that alter the profitability that was demonstrated in the corresponding feasibility studies and those were used to decide to carry out the projects.
All the information generated by the exercise of the decentralized mining industry should be available ipso facto in the information systems of the national mining administration and the information generated by the national government’s management of the mining industry would also be available to decentralized agencies.
For this proposal, risk-takers refer to natural persons and legal persons who risk their resources in any of the activities of the mining industry or several of them, at any of the scales existing in the whole industry, that is, artisanal-scale, small-scale, and industrial-scale in its two sub-scales (small and medium scale and large scale), it being clear that artisanal and small-scale only contemplate minor extractive and concentration operations, and if they are associated with risk-takers from industrial-scales, exploration would also be possible.
The mining industry’s risk-takers must understand that their activities are normally the cause of great negative impacts on the environment and society, hence their main commitment to humanity must be the minimization of impacts so that there can be a holistically harmonious mining industry.
In such a way that it should be the interest of risk-takers in the industry, the realization only of projects that can be profitable having considered the costs both of totality of socio-environmental impacts minimization and of the social commitment with the communities in the environment of the project to be executed.
This is really difficult for risk-takers as it has been normal to try to achieve the maximum increase in dividends and stock values, but the new generations of risk-takers around the world need to be more aware of how to obtain dividends and raise the value of shares; must be people with a greater degree of sensitization and awareness about the impacts that are generated to obtain financial achievements and about repercussions on planet’s health, and on humanity; society requires that risk-takers and their managers continue to maximize the aforementioned variables but subject to restrictions of conscience and sensitivity by humanity.
(1)R&D&I-Social interaction: The R&D&i dimension provides society with technical-scientific support to improve interaction with the other dimensions of the model.
(2)R&D&I-“Risk-takers” interaction: Bilateral interaction where risk-takers must invest important quantities of resources to deepen knowledge and get improve about processes, and technologies, and about find more and better uses of their products, and on reducing impacts on society and environment.
(3)R&D&i-Environment interaction: The dimension of I&D&i is fundamental support for the minimization of environmental impacts, in such a way that anthropic activities can be carried out with the minimum possible damage.
(4)R&D&i-Government interaction: Bilateral interaction where government must invest important quantities of resources to deepen knowledge and get improves about all the aspect of mining industry, and its interaction with the environment, and society, while getting, from R&D&i, knowledge, and supplies for better performance on industry management.
Risk-takers must also understand that they contribute to the reduction of social impacts and to country progress in which they produce, when they incorporate, within the country’s territory, increasing levels of value-added to raw material or when they prefer the sale of their products, at normal market prices, within national territory border in which they carry out their productions so that mineral receives added value and is exported with greater commercial value. Of course, all this, assuming that the right conditions are being created in the host country which allows them to make greater investments and reinvestments in deepening the addition of value to products that have been produced.
It is well known that a good part of risk-takers, in truth, lack awareness and sensitivity about how dangerous the industry is, one part, do their best to evade responsibilities, while another party tries to comply with the law’s provisions or with international organizations guidelines or with what is in trend in terms of reducing socio-environmental impacts but do not really believe, or they are not interested in what they are doing in that regard, a small part is acting with conviction to achieve profit in the cleanest way possible while generating the greatest sum of attainable well-being.
The “advertising” campaigns that are carried out to position mining industry risk-takers as responsible with society and the environment, are very necessary and should even be greater, since attacking the mining industry has become “commonplace” for environmental fanatics, for fraudsters who seek profit with the attacks and for politicians who often have no other issues with which to make themselves heard in their areas, but, not everything can stay in propagandistic “makeup” or “green makeup”.
Lewis et al. (2016) reported that many mining companies have been working towards Sustainable Development Goals (SDGs) and that United Nations (UN) and national governments have been designing dialogues on how to advance the SDGs agenda with mining and other sectors. In the social dimension and the environmental dimension sections of this proposal, some examples of what these authors have referred to were given.
Holistically harmonious mining requires that risk-takers, of any scale, in the mining industry have, among their values:
• Sensitivity for the real and continuous improvement of the population’s life quality that lives in the environment of realization of mining industry projects. Motivated to promote and contribute to the socio-economic sustainability of communities around the projects.
Economía, responsabilidad social y ostenibilidad de la industria siderúrgica y metalmecánica. Ecuador. https://www.facebook.com/watch/?v=705006560030610
• Sensitivity for real and continuous improvement of employees’ life quality.
• Conviction to provide equal opportunities for applicants to be employed without incurring any discrimination other than that of being the best available person for positions.
• Commitment of each organization to its continuous search for excellence.
• Commitment of each organization to the optimization of financial benefits subject to socio-environmental awareness and sensitivity restrictions.
• Commitment not to establish commercial relationships of any kind with terrorists, drug traffickers, human traffickers, human rights violators, or with those who are commercially or financially related to the above.
• Commitment not to acquire inputs from productions that finance wars or exterminations due to religious, cultural, political, racial, gender identity, or any other internationally recognized intolerances.
• Socio-environmental sensitivity and awareness, understanding the severity of the impacts that are generated from the mining industry, if not efforts are made to prevent and minimize them.
• Awareness about the right of nations to have exports have the highest degrees of value addition and to develop increasingly sophisticated value chains within the national territory.
• Support for the growth of research, development, and innovation applied to aspects of the mining industry, by universities and corporate and government research centers of the country in which they operate, preferably in conjunction with their peers from other parts of the world.
• Preference for suppliers of goods and services that make a living in the country where the operations are carried out if they have at least the same quality as suppliers based in other countries.
• Absolute rejection of corruption in any of its forms and whoever its actors are.
• Commitment to full compliance with the laws in force in the country in which it operates.
• Understanding of the importance of the coexistence of the other mining scales, as well as other sectors of production or services that can act in the same areas without causing damage.
La minería ética por Carlos Gustavo Cano. Disponible en: https://www.youtube.com/watch?v=3O7YMJCvCRM
(1)Government-Social interaction: The government dimension contributes to society, with the economic resources that belong to it and that it manages on its behalf, everything necessary for society, also with the help of risk-takers, to self-generate real and continuous improvement of their quality of life. Governments are not responsible for achieving society’s real and continuous life’s quality improvement, they should only contribute to society achieving it.
(2)Government-“Risk-takers” interaction: Two-way interaction in which government must offer the most clarity play rules concerning risk-takers performance into national territory understanding risk-takers need to invest big quantities of resources and assume enormous risks to be able to produce, sell, get incomes and only then generate real wealth. Resources that have not been produced are not wealth. The government never should forget risk-takers can invest their resources in another country with more favorable conditions, by the other hand, risk-takers must respect and obey the country’s law and work together to improve society’s life quality and mining industry taking care of the environment without whose care, is not possible to get true life’s quality.
(3)Government-Environment interaction: The dimension of government must ensure that the anthropic activities carried out in its national territory be made with more efforts to minimize the impacts while guarding, ecosystems’ recovery capacity is not exceeded.
(4)Government-R&D&i interaction: Bilateral interaction where government must invest important quantities of resources to deepen knowledge and get improves about all the aspect of mining industry, and its interaction with the environment, and society, while getting, from R&D&i, knowledge, and supplies for better performance on industry management.
The mining industry that should want any human should like to have in a country and on the planet requires that current companies that make this broad sector up, as well as the governments, invest heavily in R&D&i applied to the industry.
Herrera (2017), pointed out that “an increasing part of the added value of the mining sector comes from the application of knowledge to the company’s resources rather than from the simple possession of those resources or associated capital investments”.
Making the mining industry holistically harmonious goes through a series of diverse transformations that have already begun, in some countries and some corporations, and that it can be accepted that they are on the right track and, both the transformations achieved so far and a large number of those are still missing are based on R&D&i.
Among different examples, the following are mentioned here:
Antamina, in conjunction with the Qaira company, developed its own drone to improve equipment maintenance and reduce waiting times for the 120 rock trucks that carry out the hauling. (Deloitte LLP, 2017).
Pietrobelli and Calzada (2018), who stated that Micomo company developed technologies with fiber optics for extraction processes, also highlighted that Power Train company markets “new remote control systems for trucks that operate at very high temperatures” wireless monitoring systems that support predictive maintenance; mentioned that Brazilian company Geoambiente “developed sophisticated geological maps, sensors, and radar images that help in the exploration phases, predicting mineral content or areas prone to erosion to monitor environmental impacts”, on the other hand, Brazilian company Verti “has developed dust suppressants that take advantage of the glycerin leftover from biodiesel plants” and Chilean company Innovaxxion has managed to reduce “substantially the waste generated in copper mining processes”.
FCH and EY (2019), pointed out that Fundación Chile created Expande Program, the Open Innovation Program in Mining, which, among other aspects, allows:
Through a linking model, connect the demand for technological solutions required by mining companies and the supply from supplier companies, to enable the installation of technological capabilities that promote the development of an industry with diversified products and services and with replicability and export potential.
Gálvez (2019), argued that Australia has been doing for a long time the work of having innovation, technology, and education as a development strategy, in such a way that Australia has already achieved that its exports of technology services and applied innovation, is 45% of its mineral exports, complementing this idea with the fact that Chile is succeeding in this regard through Pro Chile.
Guajardo and Carrasco (2019), revealed that Nautilus Minerals company has begun to develop research to start a project to extract minerals from the sea bottom and is working hard to develop technologies that resist “high pressures under the sea, with materials resistant to accelerated corrosion caused by the salts that make up seawater, technologies that are not so invasive for existing ecosystems”. Schroeder (2019), among other examples, cited, in the case of greenhouse gas reduction in metallurgy, the following examples of technologies and processes that promote energy efficiency:
• Heat recovery technology (recovery/use of heat) in the various stages of production.
• Systems for real-time control of process variables, such as temperature.
• Use of process gases.
• New technologies that promote a significant reduction in energy consumption in electric furnaces and electrolytic processes, including the respective automation and control systems.
Cepeda (2020), presented trends in technological innovation in the mining sector, among which augmented reality stands out through the EcoStruxure Augmented Operator Advisor software developed by Schneider Electric, which would achieve the following advantages:
• Reduction of downtime in front of an electrical cabinet, allowing its doors to be opened virtually.
• Acceleration of operations and maintenance ...
• Reduction of human errors ...
www.mininghub.com.br (2021), is presented as an open innovation initiative aimed at all members of the mining sector, among its partners, there are dozens of companies.
R&D&i applied to the mining industry in all its different aspects should be encouraged, this type of research should be aimed at finding solutions, rather than a mere diagnosis and non-constructive criticism, that is, beyond determining that something is not it is fine as it is being done, you must go in search of the solution.
R&D&i is conceived in this model with 4 components, namely:
• Existing universities and research centers in the country, which should work in cooperation with universities and research centers in other countries;
• Risk-takers in the mining industry existing anywhere in the world;
How one mining giant is using technology to revolutionize operations. https://www.cnbc.com/2018/06/25/how-one-mining-giant-is-using-technology-to-revolutionize-operations.html
• Existing governments in the country, at its different levels (national, regional and local);
• Natural persons and non-governmental organizations, national or foreign, that do not belong to research centers or universities but that present research or development or innovation projects that are useful for the mining industry or the society and/or environment impacted by the industry.
The typical sources of financing for R&D&i would be risk-takers and government organizations, the former oriented towards solving their problems and supporting their policies regarding aspects that are specific to their businesses, the environment, and society; the governments orienting their R&D&i to industry, society, the environment, and their management in the industry.
The R&D&i guidelines, in a country, should be, at least, on:
• The different processes typical of the mining industry.
• Technologies to improve production processes and environmental quality related to the production of primary mineral goods and products derived from them, with greater added value.
• New uses for both ores and “sterile” and mineral-based products.
• Optimization of the benefits and losses of the mining industry on society.
As part of the interaction between the governmental dimension and that of risk-takers with R&D&i, there should be incentive programs to promote the development and commercialization of the products and services that are generated as part of the R&D&i process; these incentives should come directly from the government resources, as well as resources from risk-takers in the mining industry in exchange for reductions in their tax burdens or any other benefits of interest to risk-takers; eventually, resources would be added from companies that do not belong to the mining sector but that have an interest in the research, developments or innovations that are being carried out.
In the social sphere, it is proposed that communities should have the rights to grant permits or refuse to give them concerning the production activities that it is intending to carry out in their area, but since the mining industry is of public utility, they can only be denied if they are supported by proven and globally accepted scientific criteria.
It is proposed that communities, directly, negotiate with the risk-takers about the necessary support so that communities can sustain economic activities during and after mining industry activities that it is intending to carry out in their territories. Emphasizing that, communities’ wishes and risk-takers support can only be in production activities and/or services that can be carried out as contemplated in territorial ordination planning of the sub-basin to which community belongs.
Risk-takers should prepare a Comprehensive Continuous Production Plan (2C2P) that must be conformed of the production project to be carried out, the mine closure plan (in the case of mining), the environmental studies required by country laws, and the plan of the economic activities that community members will carry out in parallel and/or after the project to be carried out, of course, the latter plan in common agreement with community representatives.
Risk-takers and communities will sign the Mining Community Contract (M2C) in which they will establish everything pertinent to the relationship and commitments that have occurred as a result of the negotiations, including what is related to the plan of economic activities mentioned in the previous paragraph.
Once the economic activities plan of the community is in the 2C2P, to the entire satisfaction of the community and the M2C has been signed, the community will issue a Community Mining Authorization (CMA) for risk-takers to carry out what was agreed, in their area and concerning their community.
It is recommended that governments incorporate, among requirements to be able to request mining rights, the consignment of CMA, M2C, and 2C2P.
Regarding the environment, the model proposes that society, risk-takers, and governments continue to support the implementation of “green mining” processes, circular economy, UN sustainable development goals, and everything else that arises and that allows the exercise of mining industry activities in a way every time, less harmful to society and the environment.
R & D & i is the key to progress in the efforts that risk-takers have been making to minimize negative impacts, and is essential to mining industry becomes every time, more “green”.
It should be noted that the mining industry’s success in reducing negative impacts can be more efficient if all those involved are sensitized and raise awareness about the paramount importance that continuous minimization of negative impacts really has.
Concerning governments, this model contemplates that:
• Governments have the role of “orchestra director”, not interpreters; the “state-entrepreneur” leads to accumulation of inefficiencies that end up paying, sooner or later, society and environment.
• A very significant function of governments is to collect and generate basic information for the mining industry, make public the existing information that has not been classified as strategic for the security and defense of the nation, and invest in deepening of regional geoscientific and environmental knowledge.
• Governments must invest in technical-scientific definition (without fanaticism), previous collecting field data, about environmental sensitivity within the national territory; they must also invest in ordination territorial with real participation of communities that live in each sub-basin.
• Promote but not substitute, under any excuse, the participation of communities in the definition of their own local destinies, of course, within the framework of nation’s laws and based, for their decisions, on humanity’s technical-scientific knowledge.
• Promote mining industry activities within projects that guarantee socio-economic-environmental sustainability over time and are environmentally and socially balanced.
To attract investment into the mining industry, governments should:
• Reduce tax rates for production and income. Taxes should be lower for projects that contemplate the greatest amount of value-added to raw material within the national territory. Raw materials exportation should have the highest tax rates in the country.
• Delete Import taxes for technologies and inputs that are not produced in the country, or that are more efficient, or that generate less impact on the environment.
• Offer fiscal stability (national, regional, and local), during the life of the project, based on conditions that were used to make the feasibility calculations.
• Have a successful performance in reducing inflation.
• Preferably, have an economy in economic growth.
• Offer constant performance, over time, in order to minimize national political and economic risks.
• Offer legal and real guarantees of capital repatriation.
• Have a successful performance in the control of public spending.
• Provide sufficient security guarantees that unjust-expropriations, nor confiscations, nor nationalizations will not be incurred if such despotisms have occurred in the country’s past.
• Free production assets reversion in the mining industry should not be contemplated in the legislation.
• Reform current legislation in order to ensure that the establishment and total authorization of companies to legally operate in the country be possible in short periods of time, from the formal start of the process, without incurring laxity with capital origin verification.
• Carry out everything conducive to an increase in exported products value.
• Coordinate with risk-takers and universities and institutes so that through “finishing school” type programs, professionals and technicians, existing in the nation, can reconvert into knowledge and skills, while universities and institutes do what is conducive to that their new graduates are already adapted to mining industry requirements.
• Establish all the necessary incentives, as well as funding for fifth-level studies, in order to increase national R&D&i and promote the production and marketing of products and services derived from R&D&i processes.
• Establish a mining industry governing agency that is light, efficient, with decentralized units in the regions, for mining industry management, with an operationally autonomous institute of applied research-oriented to all aspects of interest for all of the mining industry. These institutions must be satisfied with professionals who obtain their positions by contests.
• Prepare the set of legal provisions that govern the industry with the least discretion of public officials.
• Allow artisanal mining and small-scale mining only in areas that have already been intervened and in such a way that the exercise of their activities contributes to the partial recovery of the areas; It can also be allowed, in areas that have been explored by industrial mining (juniors or majors), and that due to their statistical dispersion characteristics are not of interest to them, whether they do it in conjunction with industrial companies or by themselves.
• Promote the evolution of artisanal and small-scale miners.
Regarding risk-takers, this proposed model includes:
The mining industry’s risk-takers are very important to world society, but they need to increase, in some cases, and create, in others, levels of sensitization and awareness about the damages they cause to society, the environment, and nations.
Although, naturally, risk-takers want to carry out the largest number of projects, they should focus only on projects that can be profitable, having considered all the costs of minimizing socio-environmental impacts, as well as those related to the commitments established with the communities.
Risk-takers should contribute to the real progress of nations, which is possible if they try to incorporate added value to their productions, within the territory of the host country, of course, if the country offers conditions and advantages; they should also support this progress by investing in R&D&i, within country’s territory and, finally, by supporting the national human capital increase.
The holistically harmonious mining industry requires that risk-takers, of any scale, in industry count, among their values, with:
• Sensitivity for the real and continuous improvement of the quality of life of employees.
• The conviction of offering equal opportunities to applicants to be employed without incurring any discrimination whatsoever other than being the best available to occupy the positions.
• Commitment to its continuous search for excellence.
• Commitment to optimizing financial benefits subject to socio-environmental awareness and sensitivity restrictions.
• Commitment not to establish relationships, of any kind, with terrorists, drug traffickers, human traffickers, human rights violators, or with those who are commercially or financially related to the above.
• Commitment not to acquire inputs from productions that finance wars or exterminations due to religious, cultural, political, racial, gender identity, or any other internationally recognized intolerances.
• Preference for suppliers of goods and services that make life in the country where the operations are carried out, if they have, at least, the same quality as suppliers based in other countries.
• Absolute rejection of corruption in any of its forms and whoever its actors are.
• Commitment to full compliance with laws in force in the country in which it operates.
• Understanding the importance of other mining scales coexistence, as well as other sectors of production or services that can act in the same areas without causing damage or hinder operations.
This model proposes a very important role for R&D&i as a foundation for the achievement of the objectives set out in it, it is required that both risk-takers and governments invest more and more in R&D&i applied to the mining industry in all its different aspects with the firm purpose of finding solutions, rather than the typical diagnosis and criticism that abounds today, especially in environmental and social aspects.
Finally, it is concluded that what is proposed in this model would lead to a significant reduction in the number of new viable projects, which, on the one hand, will produce a reduction in future supply that will generate an increase in prices, causing various technologies that could be implemented, at current prices, they cannot be carried out but, on the other hand, advances will be generated in more efficient production technologies in economic and socio-environmental terms that make it possible to comply with what is proposed in this model.
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