Leveraging Mining-Related Infrastructure Investments for Development (Rails, Port, Power, Water and ICT)

To be beneficial for a country’s development, non-renewable resource extraction should be leveraged to build long-term assets, such as infrastructure, that will support sustainable and inclusive growth. This is especially critical for countries facing an infrastructure-funding gap (e.g. the World Bank’s Africa Infrastructure Country Diagnostic has estimated that Africa faces an annual infrastructure funding gap of US$31 billion); leveraging extractive industry-related investment could help fill this gap. Historically, natural resource concessionaires have adopted an enclave approach to infrastructure development, providing their own power and transportation services to ensure that the basic infrastructure needed for their operations is reliably available.

Shared-Use Infrastructure Along the World’s Largest Iron Ore Operation: Lessons Learned from the Carajás Corridor

The Carajás railway corridor connects the world’s largest iron ore mine, operated by mining company Vale in Brazil’s Amazon region, to the company’s maritime terminal. Carajás is one of the few integrated railway corridors financed by a mining company that, apart from transporting the iron ore that made the investment viable, also transports general cargo and operates passenger services. Besides the shared-use or open-access arrangement along the railroad, third parties also benefit from Vale’s investments in port, airport, and information and communications technology (ICT) infrastructure.

Building on CCSI’s work on leveraging mining-related infrastructure investment for development, this study provides insights into the logistics and institutional setup of the Carajás corridor and lessons learned for other countries seeking to implement a similar shared-use approach. It also provides insights into the benefits and costs related to the corridor, as well as opportunities to increase the development benefits resulting from its shared use. Read the full report (in high resolution or low resolution) and the executive summary.

Policy Papers

The initial phase of this project consisted of a worldwide survey of case studies of shared use of mining-related infrastructure. Four Policy Papers deliver the findings for 1) mineral railways and ports, 2) power infrastructure, 3) water infrastructure, and 4) internet and telecommunications.

World Bank collaboration on mine-power synergies study in Sub-Saharan Africa

In 2012-2013, CCSI collaborated with the World Bank to systematically assess the potential and challenges of power-mining integration in Sub-Saharan Africa (SSA). To that end, CCSI built a new database, the Africa Power-Mining Database 2013: it contains 455 projects in 28 SSA countries with a minimum of USD 250 million gross value of ores reserves, in all project phases, spanning the years 2000-2020. This database estimates the demand for power in 2000, 2012 and 2020 and identifies the range of past, present and future power sourcing arrangements for the 455 projects. The study also includes an assessment of the different institutional settings and policy instruments that have the potential to lead to better integration between mines’ investment plans in power infrastructure and governments’ plans for national power development. The World Bank final publication is available here, and the database is available here. Both were launched at Mining Indaba 2015 (see press release). See also CCSI’s study on renewables and mining, discussing similar issues in the context of renewable energy.

Australian Government grant to develop a shared-use framework for mining-related infrastructure

In April 2013, CCSI was then awarded a grant from the Australian Government to develop an economically, legally and operationally rational framework to enable shared use of mining-related infrastructure, including rail, ports, power, water, internet and telecommunications. The framework was obtained by distilling best practice principles from infrastructure developments around the world, guided by expert opinion. The framework was refined through in‐depth case studies in Liberia, Sierra Leone and Mozambique, although its principles aim to be of general relevance to all resource rich African countries. The Framework to Approach Shared-Use of Mining Related Infrastructure was finalized in March 2014.

Expert Workshop

In November 2013 an expert workshop co-hosted by CCSI, the Natural Resource Charter and the Sustainable Development Solutions Network, was held to get feedback on the framework from mining-related infrastructure experts from academia, mining companies, governments, and donors and to discuss ways on how it could be improved. A summary of the discussions at the expert workshop is available here. The presentations from the workshop, revised to reflect the feedback, are available here: introductory slides, power, internet and telecommunications, rail and ports, and water.

World Bank grant on cross-border resource corridors and regional integration

In 2014, CCSI was awarded a grant from the World Bank to determine to what extent cross-border resource-based transport and energy corridors can be a catalyst for regional integration. The report explores in depth whether four African corridors have/can lead to regional integration. These consist of the Nacala railway corridor (Mozambique-Malawi), the Northern Corridor (Great Lakes Countries – Kenya), the Simandou /Nimba railway corridor (Guinea-Liberia) and the Lapsset pipeline and railway corridor (Uganda-South Sudan-Ethiopia-Kenya). Lessons learned from international experiences are also highlighted, including from the Arctic rail corridor (Sweden-Norway), Antofogasta rail and port corridor (Chile-Bolivia), the GSBOL gas pipeline (Brazil-Bolivia), the Baku–Tbilisi–Ceyhan oil pipeline (Azerbaijan-Georgia-Turkey), Maputo rail and road corridor (South Africa-Mozambique) and the China-Kazakhstan interconnection at the Korgas Pass. The World Bank published the report in February 2016. In this article, the importance of the implementation of cross-border corridors for the participation of resource rich countries in the Global Value Chains is highlighted.

World Bank grant on a toolkit for cross sector infrastructure sharing

The World Bank awarded a grant to CCSI and McMillan Keck to develop a global online toolkit on infrastructure sharing to expand access to telecommunication services. Through a wide range of case studies, the toolkit aims to:

·       Inform how stakeholders can promote better coordination among different ministries, utilities and telecom networks, development agencies, and private sector firms;

·       Serve as an intellectual and operational focal point; and

·       Inform government policy and public sector practices, as well as support technical assistance, advisory services and infrastructure financing by donors.

The toolkit is available here.

Implementing Shared-Use of Mining Infrastructure to Achieve the Sustainable Development Goals
Perrine Toledano and Nicolas Maennling, in Sumit K. Lodhia , ed., Mining and Sustainable Development, Current Issues (Series: Routledge Studies of the Extractive Industries and Sustainable Development), Chapter 13, January 2018

Many of the Sustainable Development Goals will only be achieved if the population has access to basic services, such as access to water, power, transport and telecommunications. However, in many developing countries there is a lack of infrastructure to guarantee these services and there are insufficient public funds to finance growing needs. In resource-rich countries, the mining sector can play a key role in increasing access to infrastructure. Mining–related infrastructure is often developed to serve the exclusive need of the investors, but if it is shared and developed to serve the broader needs and uses of the host economy it could fill some of the infrastructure funding gap, which is much needed to make progress towards achieving more than half of the SDGs. In Chapter 13 of the monograph Mining and Sustainable Development: Current Issues,  Perrine Toledano and Nicolas Maennling outline how implementing shared-use mining–related infrastructure may contribute to the post-2015 agenda, by going through the relevant SDGs.