Michael Stanley, Mining Lead World Bank Group Washington, D.C. An Enabling Investment Climate:...
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Michael Stanley, Mining Lead World Bank Group Washington, D.C. An Enabling Investment Climate: Afghanistan Oil, Gas and Mining What the Sector Can Provide – inclusive, integrated growth by leveraging large, private-sector anchor investments into mining, oil & gas
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Transcript of Michael Stanley, Mining Lead World Bank Group Washington, D.C. An Enabling Investment Climate:...
Michael Stanley, Mining LeadWorld Bank GroupWashington, D.C.
An Enabling Investment Climate:Afghanistan Oil, Gas and Mining
What the Sector Can Provide – inclusive, integrated growth by leveraging large, private-sector anchor investments into mining, oil & gas
2
Challenges Ahead
• field security• long lead times for exploration / development • “good fit” policy, legal & regulatory frameworks • land acquisition / ROW• risk mitigation • shared access infrastructure• strengthening institutions / building adsorptive capacities
What investors want
Geological Potential – access to mineral resources Geodata
Conducive Investment Climate – banking, repatriation of profits, realistic foreign exchange controls
Investment Laws
Security of Tenure – transparent, non-discretionary exploration / mining rights and regulations
Mining Cadastre
Consistency of Mineral Policy – competitive fiscal conditions, stability of exploration / exploitation terms and conditions
Mineral PolicyTax Legislation
Stability of Legislation – predicability of exploration / mining terms and conditions, tax liability, fiscal regime. Good enough fit
Mining, env. / social, and tax regulations
Availability of Infrastructure Public Private Partnerships
The Enabling Investment Climate: Geodata, Institutions & Adsorptive Capacity
Modified after (a) Transitional Islamic State of Afghanistan: Mining as a Source of Growth, Report No. 28231-AF, The World Bank 2004; and (b) James Otto – A Global Survey of Mineral Investment Preferences, Mineral Investment Conditions in Selected Countries of the Asia Pacific Region (United Nations ESCAP 1992).
Geodata
5
REGIONALGEOLOGICAL
MAPPING
MINERALRESOURCES
ASSESSMENT
REGIONALEXPLORATION
10
100
1,000,000
>10,000,000
100,000
USD/km2
DETAILEDEXPLORATION
MINEDEVELOPMENT
PUBLIC FUNDING
PRIVATE FUNDING
Aynak
HajigakSherbegon
Pre-Competitive Geodata
Good Fit Policy, Legislation, Regulations
The Enabling Investment Climate: Strengthen Institutions and Build Adsorptive Capacity
“Good fit laws and regulations”
•Effective Sector Policy
• Transparent, non-discretionary licensing / award of contract procedures (first come and tenders)
• Good fit regulations, improved implementation
• Non-discretionary, transparent contract monitoring and compliance procedures
•Transparent and efficient implementation of royalty and tax regime
•Development of a robust inspection regime to check compliance with health, safety and environmental standards
The Sectoral Gaps in Afghanistan
Inputs Outputs OutcomesPrivate and public infrastructure (PPI)
Mobilize infrastructure investments
PPI dialogue and options analysis
FDI into PPI shared-use infrastructure
Open access to infrastructure
Improved access to regional trade / transshipment opportunities
Strengthening of laws, policies & regulatory oversight
“Good fit”
Legal & regulatory oversight
Improved land / title verification processes
ROW , resettlement and compensation processes
Security of Tenure
Vibrant commercial enterprises
Improved land-acquisition
The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity
Inputs Outputs OutcomesRisk mitigation instruments covering land reform and regulatory oversight
Financial risk instruments in place
Improved financial market perspective on government obligations
Strengthen regional trade and commerce
Options analysis on prioritized regional interconnects
Early regional trade / transshipment agreements
The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity
Inputs Outputs OutcomesPublic financial management of EI revenues (PFM)
Revenues Transparency
Macro-fiscal rules, revenue sharing arrangements
Dedicated expenditure arrangements
Transparency anti-corruption processes and institutions
Local benefits sharing
Rational expenditures
Building adsorptive capacity to integrate public and private sector investment / development plans
Technical studies
Integrated public and private development plans
Leveraging of private sector investments to complement public investments
The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity
Inputs Outputs OutcomesBuilding enterprise development capacity for (jobs) around competitive industries
Skilled local labour for direct / indirect jobs
SME’s cluster-industries
Economic growth through direct / indirect linkages
Beginning of economic diversification through clusters
Strengthening social mobilization for improved service delivery
Demand-side monitoring of service delivery, improved consultation , and grievance mechanisms around the sector
Empowerment of the demand-side on service delivery
Improved HDI’s around sector operations
The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity
Aynak Copper (2010)
HajigakIron Ore(2011)
Dushi Gold(2010)
Amu Darya Basin(2011)
View Sector Investments within Integrated Corridors
46810121416
Year 2
World Bank Group
Input: Power or water
Economic diversification, clusters
Map Legend
Mine Zone of Economic / cultural impact
Output Infrastructure
Inclusive Growth Corridors
•collect & dissemination of geodata• implement “good fit” laws and regulations•Strengthen institutions and adsorptive capacity• focus enabling investment drivers:o open access, public private infrastructureo gaining right-of-wayo structuring risk mitigation instrumentso strengthen regional trade and commerce interconnectso Public financial management of EI revenues (PFM) o Building adsorptive capacity to integrate public and private sector investment /
development planso Building enterprise development capacity for (jobs) around competitive industrieso Strengthening social mobilization for improved service delivery
o government takes a resource corridor approacho inclusive integrated growth
Summary
What Can Be Achieved In the 10 Years
• Mines -- Two major industrial mines in operation (Aynak and Hajigak); one or more hydrocarbon blocks producing, 2 - 4 smaller scale industrial mines in gold, lithium, other metallic minerals; 200+ licensed quarry operations, gemstones, and other artisanal production.
• Infrastructure -- Major transportation (rail), power and water infrastructure investments in “corridors” to support mining investment; “spin-offs” in terms of local economic development.
• Governance – EITI, transparent non-discretionary sector administration, central government control over “illicit” mining and regularization of artisanal miners;
• Support – Provision of geodata, sector promotion, and resource corridor support through Government partnerships: ADB, World Bank, USAID, UKDFID, AUS AID and others.
