11. Managing mineral commodity price cycles – an industry view
The response of mining companies to strategies adopted by mineral host countries to manage cyclicality inevitably varies. Strategies which involve attempts to extract more revenues from the mining sector when mineral prices are weak to protect state budgets will naturally create problems for companies. However, the more far-sighted and socially-responsible companies will generally see it as in their interests to collaborate with governments in their efforts to ensure that the mining sector makes a full and lasting contribution to national and regional economic development. It is, after all, in a company’s interest to have a host country improve its infrastructure and its general level of education and eradicate poverty, since such improvements increase the visibility of mining’s benefits and foster the social acceptability of its activities.
The ICMM, as the representative body of many of the world’s larger mining companies, has, since its foundation, championed the cause of sustainable development in mining. It has sponsored an on-going programme of research and dialogue entitled ‘Mining Partnerships for Development’, to be applied at national, regional and community levels, and has been a vocal supporter of the EITI.
“Amongst leading companies there is now full acceptance and familiarity with annual reporting of performance against sustainable development principles using an independent third-party assured process.” “More and more developing and emerging nations are finding that…mining and metals can play a key role in addressing poverty reduction and other development issues. For their part, companies are accepting this development role, though the boundaries of responsibility between company, community and government remains a concern for all parties”.
ICMM, Mining’s contribution to sustainable development – an overview, June 2012