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extractive industries

Mining leaders focus on governance during the commodities downturn

Paulo de Sa's picture
Photo via Shutterstock

At this year’s Investing in African Mining Indaba in Cape Town, South Africa, leaders are not hiding their concerns about the commodities downturn.

Government representatives express their frustration for not having benefited enough during the boom. Policymakers lament the lack of planning that has left their countries with no cushion in their budgets, and companies are looking to cut costs so they can weather the storm. And most importantly, communities are feeling the economic impact as mines purchase less local supplies, generate fewer jobs and halt some operations. 

Not only are things slowing down, but it seems a golden opportunity has passed us by. Fatima Denton, Director of the United Nations Economic Commission for Africa, highlighted that Africa is less industrialized today than it was in 1990. After the minerals super cycle of 2000-2013, the percentage of manufacturing of African economies actually declined from 12% to 11%. 

Local content in extractive industries: a tool for economic diversification and sustainable development

Anita Marangoly George's picture
Photo by Dominic Chavez / World Bank

When you ask young people from developing countries what they want for their country, they often say opportunity. The next generation wants jobs and knowledge; they want to be connected to the global economy.

Extractive industries can foster these types of opportunities through investment in skills training and transfer of technology to local workers and companies. These technical skills are demanded in the global marketplace today and empower workers to expand their horizons and lower their risk of unemployment. 

We are discussing these issues today at a “Reconciling Trade and Local Content Development” conference we are co-hosting with the Mexican Ministry of Economy. This event aims to share knowledge on how investment in extractive industries can be leveraged to generate opportunities for economic diversification and employment.

When extractives companies include local business in their supply chain they foster sustainable growth and help end poverty. The most valuable contribution to long term sustainability comes from the ability of extractive industries to generate benefits through productive linkages with other sectors. The International Finance Corporation (IFC) helped make this happen in Barmer, India, where we supported a Skill Development Center that trained 7,000 people to work in the operations of Cairn Energy. Not only did this training create direct job opportunities for the local population, but the acquired skills fostered the creation of an entire eco-system of small and medium-size enterprises that provided products and services to the oil company and related sectors.

Twelve energy stories you enjoyed reading in 2015

Andy Shuai Liu's picture

What are some stories that caught your attention in 2015?
They are ones that focus on people, data and events tied to sustainable growth, climate action and efforts to end energy poverty.
As we look ahead to 2016 we’d like to recap 12 popular stories that many of you read and shared in 2015. Thank you for a year of continued and growing readership. Tell us in a comment what you’d like to hear more of in the next year.  

New Senior Director of Energy and Extractives on Challenges and Opportunities

Anita Marangoly George's picture

Q: As the new Director for the Energy and Extractives Global Practice at the World Bank, can you tell us about the greatest challenges you face in Extractives?

A: Extractive industries are complex and often risky, but when managed well they can foster transformative development in those countries that most need it.  Extractives play a dominant role in 81 countries whose economies together account for a quarter of world GDP. These 81 countries also represent half of the world’s population and nearly 70 percent of those in extreme poverty.  Given the need of these countries, a focus on natural resource management is important, but we must work diligently to mitigate the risks and improve governance structures so that the wealth generated from these activities benefits the poor.  Similarly, a cornerstone of all the work we do is to mitigate the social and environmental impacts of extractives projects so that they benefit neighboring communities as well as broader economic growth.  We also look forward to strengthening our work to improve governance of the extractive industries through efforts like the Extractive Industries Transparency Initiative (EITI) and minimizing the environmental footprint of projects by reducing routine gas flaring (Global Gas Flaring Reduction, GGFR).

Can Natural Resources Pave the Road to Africa’s Industrialization?

Paulo de Sa's picture

Many African countries face a dilemma. After a decade of consistent economic growth, often propelled by high commodity prices, half the continent’s population still lives in poverty. Even if rising demand for raw materials from the booming cities of China and India, among others, has driven growth in Africa’s mining sector, most of the continent has not yet translated mineral wealth into industrialization and widespread economic development. Most African countries continue to export raw materials and then pay a premium to import the products made with them.

Mining Contracts – Five Tips for Governments and the Rest of Us

Michael Jarvis's picture

Mining is a high stakes industry. For the growing list of countries looking to translate underground assets into tangible benefits above the ground, the ability to negotiate and implement a good deal is critical.  However, capacities to do so are often weak. A handy resource is now available to help countries. And it’s free!

Mining in the Congo Basin: Getting to the Heart of the Challenges

Leo Bottrill's picture

Film is a powerful tool for explaining environmental issues. I first learnt this lesson while trying to enlist local communities in northern Vietnam to help protect a strange blue faced and critically endangered primate called the Tonkin Snub Nosed Monkey. After a morning spent bombarding local leaders with facts and figures, they were polite but unmoved.

Thinking of Gender Every Calendar Day

Katherine C. Heller's picture

It’s 2013 and already, my calendar for the year is filling up with activities, projects and events. But this year, I’m even more excited than usual to look up at my wall, because this year’s calendar focuses on the World Bank’s Gender and Extractive Industries (EI) program.  With a different cartoon each month, conceptualized by members of the Oil, Gas, and Mining team, the calendar features different dimensions of gender and the oil, gas, and mining industries, and the lessons we’ve been learning through our work in extractives-impacted countries and communities.

"One of the Most Beautiful Initiatives"

S. Vijay Iyer's picture

The title for this blog post comes from Mr. Amadou Cisse, Minister of Mines of Mali, who said that the Extractive Industries Transparency Initiative (EITI) “was one of the most beautiful initiatives that the World Bank has ever supported.” 

The Minister, along with many of his African peers, participated at the huge Investing in African Mining Indaba event, an annual gathering in Cape Town. Mr. Cisse went on to add that “if there is no transparency, there is no peace.”