Abstract
The United Nations Sustainable Development Goals (SDGs) set targets for all nations in the most important areas of human development, as well as environmental protection and climate change, for the period 2015-2030. Mining, through its extensive activities and prominent presence in developing countries, has the potential to contribute towards achieving the SDGs by 2030. Mining can positively influence achievement of the SDGs by creating employment for local communities, generating revenue for governments, fostering broad-based economic development, and providing minerals essential to technologies, infrastructure, energy and agriculture. Nevertheless, mining operations present potential risks to the attainment of the SDGs. The sector has contributed to many of the challenges that the SDGs aim to address, such as social inequality, health issues, and environmental degradation.
The challenge for policymakers is to optimally utilise the mining sector (among other sectors) to attain the sustainable development goals. This study contributes to the ongoing debate regarding attempts to pursue sustainability in the minerals sector, by focusing on reducing the negative impacts of mining in developing countries. More precisely, the study provides an empirical estimation of the environmental and technical performance of large-scale gold mining in developing countries, to assess, measure, and monitor sustainability performance. Moreover, the study provides an empirical impact evaluation of the health outcomes and welfare loss suffered by residents near mining in developing countries.
The study reports three main findings. First, the overall environmental performance of mines in developing countries was low (66%), while the technical efficiency of large gold mines in developing countries was 70%. Second, we found that on average, dynamic technical efficiency in these mines was 73%; the average dynamic technical efficiency was observed to have a decreasing trend, of 0.3% annually. The study also found that on average, dynamic environmental efficiency was 56%. However, the average dynamic environmental efficiency trend had a decrease of 0.6% annually. Third, we found that that health outcomes (proxied by stunting rate) were significant within 10km of a nearby mine. The probability of a child in the treated group being stunted was 22.6% greater than for a child with similar social, economic and environmental risk factors in the control group. Furthermore, the results showed that households within 10km of the mine are spending USD24 (55 202 Tanzanian shillings (TZS) more on health per person per year than those further than 10km away.
vii
Based on these findings, the study makes three main recommendations. Firstly, it argues that overall environmental and technical performance is poor, which implies that there could be structural rigidities, poor environmental policies and regulations, poor enforcement, or any combination of the three. The study makes recommendations for future studies that will seek to identify the determinants of both technical and environmental efficiency in static and dynamic analysis. Secondly, the study argues that environmental regulations should be tightened, to ensure that the pollution emitted by mines is within acceptable limits for health, as laid down by the WHO. Moreover, there is a need for a thorough review of industrial policies (especially in terms of local content) to ensure that compensation policies and local multiplier effects are adequate to offset the negative health and income effects. Thirdly, the study argues that sustainable mining can bring hope to millions of people, especially in developing countries, and especially if mining takes the necessary strategic steps (short-run and long-run measures) towards improving their efficiency and fulfilling their considerable potential to help deliver the SDGs.
Keywords: environmental efficiency, technical efficiency, mining pollution, health effects, willingness to accept.