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World Bank Document Public Disclosure Authorized Vt _ Public Disclosure Authorized *~~~ a '- f l ' ': _. .. .. Public Disclosure Authorized . _ _ ~*6 , 9 - : k.~~~-oo; !, *09% Public Disclosure Authorized Large Mines and the Community Socioeconomic and Environmental Effects in Latin America, Canada, and Spain edited by Gary McMahon and Felix Remy TIlE WORL,D BAN K Washington, DC INTERNATIONAL DEVELOI'MENT RESEARCH CENTRE Ottawa * Cairo * Dakar * Montevideo * Nairobi * New Delhi * Singapore Publishedj i,,z! by the International Development Research Centre PO Box 8500, Ottawa, ON, Canada KIG 3H9 and The World Bank 1818 H Street, N.W., Washington, DC 20433, USA (C International Development Research Centre 2001 Legal deposit: 3rd quarter 2001 National Library of Canada ISBN 0-88936-949-6 (1DRC) ISBN 0-8213-5002-1 (The World Bank) The views expressed are those of the author(s) and do not necessarily represent those of the International Development Research Centre or The World Bank. Mention of a proprietary name does not constitute endorsement of the product and is given only for information. A microfiche edition is available. The catalogue of IDRC Books and this publication may be consulted online at http://www.idrc.ca/booktique. About the Publishers The International Development Research Centre (IDRC) is committed to building a sustainable and equitable world. IDRC funds developing-world researchers, thus enabling the people of the South to find their own solutions to their own problems. IDRC also maintains information networks and forges linkages that allow Canadians and their developing- world partners to benefit equally from a global sharing of knowledge. Through its actions, IDRC is helping others to help themselves. IDRC Books publishes research results and scholarly studies on global and regional issues related to sustainable and equitable development. As a specialist in development literature. IDRC Books contributes to the body of knowledge on these issues to further the cause of global understanding and equity. IDRC publications are sold through its head office in Ottawa. Canada, as well as by IDRC's agents and distributors around the world. The full catalogue is availahle at http://www.idrc.ca/booktique/. Founded in 1944. the World Bank Group is the world's largest source of development assistance. The Bank. which provided US$15.3 billion in loans to its client countries last year. is now working in more than 100 developing economies, bringing a mix of finance and ideas to improve living standards and eliminate the worst forms of poverty. For each of its clients, the Bank works with government agencies. nongovernmental organizations, and the private sector to formulate assistance strategies. Its 67 country offices deliver the Bank's program in countries, liaise with government and civil society, and work to increase understanding of development issues. The World Bank is owned by more than I 80 member countries whose views and interests are represented by a Board of Governors and a Washington-based Board of Directors. Member countries are shareholders who carry ultimate decision-making power in the World Bank. The Bank uses its financial resources, its highly trained staff, and its extensive knowledge base to individually help each developing country onto a path of stable. sustainable, and equitable growth. The World Bank's Office of the Publisher works to advance the Bank's knowledge management objectives and communication goals by initiating, developing, producing, promoting. and disseminating World Bank publications to disseminate knowledge, research results, and data gathered by the Bank or on behalf of the Bank; generate support - in industrial countries - for the Bank's work on development issues: and enhance understanding in developing countries about the Bank's work program, mission, and operations. Contents Foreword - Caroline Pestieau and James Bond ....................................................... v Chapter 1. Key Observations and Recommendations: A Synthesis of Case Studies - Gary McMahon and Felix Remy Introduction ................................................................. 1 Key issues ............................................................. 3 The mining operations ................................................................. 7 Latin America: costs and benefits of the mining operations ....................................... 10 Latin America: negotiation and implementation processes ........................................ 22 Case studies from developed countries: Spain and Canada ..................................... 25 Lessons learned and recommendations ................................................................ 32 References ................................................................. 38 Chapter 2. Bolivia: Turning Gold into Human Capital - Fernando Loayza, Ismael Franco, Femando Quezada, Mario Alvarado Introduction ................................................................ 39 Puquio Norte .............................................................. 44 Inti Raymi and its local context ................................................................ 54 Impacts of Inti Raymi ................................................................ 68 Impacts, best practices apd sustainability ................................................................ 81 References ................................................................ 85 Chapter 3. Chile: Size Does Matter - Julio Castillo, Jose Miguel Sanchez, Ver6nica Kunze, and Rodrigo Araya Introduction ................................................................ 87 Conceptual framework ................................................................ 88 The Case of La Escondida Mining Company ... .................................................... 95 The Case of the Candelaria Mining Company ......................................................... 109 The Case of the Fachinal Mining Company ............................................................. 121 Conclusions and recommendations for best practice ............................................. 133 References ................................................................ 142 Chapter 4. Peru: Learning by Doing - Alberto Pasc6-Font, Alejandro Diez Hurtado, Gerardo Damonte, Ricardo Fort, and Guillermo Salas Introduction ............................................................... 143 Definitions and variables ............................................................... 143 The Case of Yanacocha Mining Company .............................................................. 147 The Case of Antamina Mining Company ............................................................... 177 Mining company best practices and benefits ........................................................... 189 References ................................................................ 197 iii iv CONTENTS Chapter 5. Spain's Almaden Mine: 2 000 Years of Solitude - Enrique Ortega Girones and Carlos Dfez Viejobueno Introduction ............................................................ 199 The Almaden mining district ............................................................ 200 Socioeconomic legacy of the Almaden mining district ............................................. 202 Balance of mining activity in Almaden ............................................................ 205 Analysis of corrective measures taken: Almaden's conversion plan ........................ 208 Assessment of the conversion plan for the Almaden region .................................... 212 Conclusions ............................................................ 217 Glossary of "best practices"............................................................ 219 References ............................................................ 221 Chapter 6. Canada: From Fly-In, Fly-Out to Mining Metropolis- Archibald R. M. Ritter Introduction ............................................................ 223 Mining, the community and public policy in Canada ................................................ 224 Voisey's Bay Nickel Project: can harmony and equity be negotiated prior to start-up? ............................................................ 232 Diamonds in the Northwest Territories: the Diavik Mine .......................................... 238 A mature mine in an established region: potash mining in New Brunswick ............. 245 Sudbury: the emergence of a mining metropolis? .................................................... 250 Conclusion: perspectives from Canadian cases on mine/community relations ........ 256 References ............................................................ 260 Chapter 7. Uranium Mining in Northern Saskatchewan: A Public-Private Transition -Graham F. Parsons and Ron Barsi Introduction ............................................................ 263 Uranium in Saskatchewan ............................................................ 264 Uranium mine development through the state ......................................................... 274 Uranium mining in Northern Saskatchewan in the 1990s ........................................ 287 Uranium mining industry effects on regional and community development ............. 303 A comprehensive framework for mining development ............................................. 322 Mining and sustainable regional and community development ................................ 328 References ............................................................ 330 The editors
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