Just compensation value and sustainable development for large scale mineral projects in developing economies

This research intends to develop a framework for assessing just compensation values for mining projects, where they might contribute toward a responsible, profitable, and sustainable path to economic growth and development. More specifically, it will deal with methods to determine a “sustainable” rate of mineral extraction, putting a dollar value on the environmental impacts from various levels of mineral extraction, and how a collaborative group including mining concerns, governmental agencies, and concerned citizenry, might function collectively to invest available monies into the region’s economy. The project focuses on an emerging (society) political economy (Chile) and uses an interdisciplinary approach. (a) Objectives: The approach rests on the assumption that the policy objectives of environmental protection and sustainable economic development can be subsumed into the “Hartwick rule” goal of investing (financial and in-kind) mining rents in natural, social, and infrastructure capital. Specific research tasks include: Compilation of data on the initial (ex ante) cost estimates for environmental compliance; analysis of environmental monitoring/remediation; analysis of the opportunity for alternative compensation/remediation packages; analysis of third party environmental groups; and determination of the circumstances under which the minerals industry would make monies available for investment into a country with a developing economy’s infrastructure projects. (b) Approach: Minerals industry (company, regional and national) review of copper related reserves, production, methods of production, production costs, and profits. Determination of environmental costs on a per unit basis related to copper production, by review of U.S. EPA regulations, methodology, and models. Assessment of collaborative feasibility, by determination of the existence of web sites facilitating electronic information exchange at the company, governmental, regional and NGO level. (c) Expected results: The expected results of a study of this nature -- which uses information gleaned from the private and government sectors, and incorporates environmental standards (minimum to maximum) -- is to aid in policy decisions relating to benefit transfer to local/regional infrastructure investment. Results from this study potentially can be used by both the mining industry, government and regional groups in setting fee/tax/compensation schedule and negotiation frameworks to further “sustainable development.