Mineral Policy

3. Aligning mineral policy with other institutional arrangements

A mineral policy cannot exist in isolation. It should be aligned with the government’s overall economic policy and with the institutional arrangements that form the government bureaucracy.

National, federal or provincial government structures

One of the relevant policy questions for governments in establishing institutional arrangements to govern the mining sector is how to divide up responsibility between national, federal and regional structures. It may seem obvious that a mining authority must have responsibility for licensing, inspection and monitoring, mineral policy and promotion, geological information and statistics. However, there can be many variations on this model and in the institutional arrangements that are applied to the mining sector.

Some countries such as Canada, the United States, Australia and Pakistan have a federal system of government with strong federal structures. These provinces or states own and manage their own natural resources, including minerals. In these countries, there is a national mineral policy but provinces are free to develop their own minerals policies. Whilst there needs to be synergy between the national and provincial mineral policies, variations between provinces are allowed.

A more common model, particularly in developing countries, is where the national government only is responsible for mineral development. The mining authority may be present in an urban centre, usually the capital city. Applications for exploration and mining can only be submitted at this central office.

Some countries, such as South Africa, have a strong regional presence as well as a head office located in the capital city. In South Africa, each province has a regional Department of Minerals Resources office, where applications must be lodged for all mining operations.

How a country decides to organise its governance structures for mining development is a policy choice and decisions should consider factors such as the size and population of the country, the level of exploration and mining activity, and the ease of access to mining authorities.

Policy in practice: Institutional arrangements in Canada

In Canada, each province has its own mining law, and provinces compete for mineral investment.

This type of arrangement requires that the roles and responsibilities of the federal department in charge of mining, Natural Resources Canada, and each of the 10 provinces, are clearly defined.

Determining institutional structures

Institutional arrangements are determined by policy and decisions relating to institutional structures may have far-reaching consequences on how efficiently the mining industry operates.

Many countries group all mineral related functions under one mining authority. In some countries, the mining authority has a division charged with managing the social, environmental and labour impacts of mining. In others, these are the responsibility of ministries and/or core institutions charged with these various subject areas.

Some countries, such as Papua New Guinea have separated out the licensing, inspection and geological survey function from the policy function.  The principle is to allow one agency to develop policy and compile mine related statistics, and to give another body, a Mining Authority or a Mining Agency, the authority to implement these policies.

In other cases, there are shared arrangements between a mining authority and the core institutions charged with the various subject areas. This type of arrangement is thought to contribute to better coordination between the institutions responsible for mining regulations and to improve understanding of how the mining industry impacts other stakeholders.

Another example of a less common type of mineral governance regime is Ghana. The government has created a Mineral Commission with a CEO who reports to a Board. This arrangement creates a closer business relationship with industry, and allows for professional-level salaries that are not limited by public service constraints.

Quite often, a country’s geological survey is a separate organisation. This is because the survey can also have a role in natural hazard research and management, or may work with municipal governments to undertake research on stability of ground for construction.