Minerals are embedded in most aspects of human life, ensuring a steady demand that makes mining one of the wealthiest industries in the world. But mines are often located in remote areas, so CSR calls for mining companies to return some of the mining wealth to local communities. The development of social infrastructure in mine sites becomes the key to doing so. “Mining creates jobs and economic opportunities, and many companies also choose to invest in social infrastructure outside of their immediate sphere of operations,” says Gold.org.
In Mexico, mining’s positive impact can permeate different aspects of social and economic dynamics. For example, CAMIMEX reported in February 2018 that the industry employs more than 2.1 million Mexicans, often in isolated communities, and the industry represents 2.9 percent of GDP. The Mining Chamber argues that a mineral deposit should be interpreted as an opportunity for progress, which should be supported to reduce the inequalities of the population.
But the research on mining developments and social impacts on communities, published by Research Gate, studied the Bowen Basin coal mining communities in Queensland, Australia, and found that the issue is not always so black and white. “The limitation that isolation placed on opportunities for economic diversification raised issues about the optimum level of social infrastructure, housing, sewage and who should pay for and provide it,” the report said. While several companies initially understood the provision of social infrastructure in mine sites as key to lure workers and diminish social disputes, the downcycle of mineral prices and changes in tax policies undermined companies’ ability and willingness to invest in social infrastructure, making them turn their gaze back to the government.
Given the rise in mining taxes imposed by the Fiscal Reform, the government created the Mining Trust Fund to return some of these resources to local communities, with the specific goal of promoting their development through social infrastructure. SEDATU reports that since its creation, the Mining Trust Fund has financed more than 1,500 infrastructure projects in 270 municipalities in the country. As part of the fund, mining companies often partner with local governments and communities to better target investments to the needs of local populations.
However, in some jurisdictions it has been unclear to miners and local communities where the resources are destined. “Three years have now passed since the reform, which is a good time to make an impact but we yet have to see any results,” says Fred Stanford, President and CEO of Torex Gold, which operated the Media Luna and El Limón-Guajes mines in Guerrero. While mining companies look to the government demanding to see the tax money they paid being returned to the communities, those communities turn to the operating mining companies for the provision of social infrastructure.
According to an article by World Policy, Chiapas is one state being left out of the mining boom. “Chiapas in southern Mexico is one of the richest in the country,” argues the paper. “As a base of operations for major mining companies both in Mexico and abroad, Chiapas is a major source of oil, gas, and lumber, as well as metallic minerals such as gold, silver, copper, iron, aluminum, uranium, and titanium.” These metals are highly demanded for technology, aircraft, medical supplies and modern infrastructure, to name only a few.
The area visited by the author – Soconusco – is located between two titanium mines, and she observed that “the two major rivers from which residents get their drinking water are now contaminated by toxic particles used in the mining process and later released into the rivers… A local doctor and nurse had established that the cancer rate among local residents had risen by more than three times in a 10-year period, in parallel with the increase in mining activity in the area… Residents also told how the stock of fish in one river area was now greatly depleted and many of the fish that remained were so deformed that they could not be sold at the market.”
Soconusco is one of the many cases that taint miners’ reputation, but this is not necessarily a widespread representation of the industry. Certain companies such as New Gold, which operated the Cerro San Pedro mine in San Luis Potosi, strive to have a positive impact in the communities. Upon closing the mine at the end of its lifecycle, the company carried out the relevant legal obligations, including reforestation.
Not only this, but it provided training to the community members so they could take up new vocations, such as sewing, construction work or farming. “It is paramount to execute a successful mine closure, one that leaves a positive and long-lasting legacy at our hosting community,” said Armando Ortega, VP LATAM of New Gold in an interview with Mexico Mining Review 2018. “The main obstacle is to ensure that in the long run our sound mining operation and community work prevails over negative and ill-founded narrative originally crafted by the opponents.”
As argued by The Mining Chamber, the industry should indeed provide progress. The country and the industry still have a long way to go, but there has been success in raising awareness about CSR. “Mining is an industry that brings employment and opportunities to parts of the country where no other industry is present,” says Stanford. “The local communities are open to mining and see the long-term advantages of the activity.”