World Bank under scrutiny over mining investment

First posted 04:01pm (Mla time) Sept 19, 2006
Agence France-Presse

http://news.inq7.net/archive_article/index.php?ver=1&index=1&story_id=21890

SINGAPORE -- The World Bank came under pressure Tuesday to justify its investment in mining projects which non-government organizations (NGOs) charged does little to alleviate poverty and wreaks environmental havoc.

"Mining does not have a good record of contributing to sustainable development or poverty reduction," said the report from non-governmental organizations including British-based Oxfam International.

It referred to one of the Bank's own studies in 2001 which said that countries dependent on mineral exports tend to have lower growth rates and living standards, and higher rates of poverty and income disparity.
Mining also causes significant environmental damage. A typical modern gold mine uses large open pits and cyanide to extract gold from ore, the NGOs said.

"Pollution caused by mining can last for thousands of years, destroying forever land and water resources that local communities depend on for their livelihoods," said the report, handed out at the International Monetary Fund-World Bank (IMF-WB) annual meeting.

The Bank's private sector arm, the International Finance Corporation (IFC), currently releases a broad report on its investments in the mining industry but the NGOs urged it to provide more in-depth information to spell out any benefits.

"We challenge the IFC to prove its development impact and account for its ongoing investment throughout the past five decades in one of the world's most socially and environmentally destructive industries: gold mining," they said.

They cited a recent study published by the journal Environmental Science and Technology which found that chemical residues from mining more than 800 years ago are still contaminating water supplies in southern France.

The IFC, a World Bank unit that provides loans and equity investments to the private sector, argues that revenues from the mining industry enable governments to fund programs aimed at reducing poverty.

Mines also provide employment and has spillover development effects in the communities around them, it says.

But the NGOs argued that it was difficult to gauge whether the IFC-supported gold mining projects actually deliver the benefits claimed because the IFC refuses to publicly report the results on a project-by-project basis.

The IFC has invested more than 100 million dollars in Newmont Mining Corp.'s Yanacocha gold mine in Cajamarca in Peru and 45 million dollars in the Marlin gold and silver mine in Guatemala, the report said.

It also approved loans totaling 125 million dollars to Newmont Mining's Ahafo gold mine in Ghana and the Kumtor gold mine in Kyrgyzstan has received 40 million of dollars in loans and equity investments.

"In none of these cases has the IFC demonstrated that poverty reduction and development benefits generated by the projects outweigh their negative impacts," the NGO report said.

Mine operations also typically require only a small number of skilled workers for positions not usually suited to poor local workers, it said.