West Africa Mineral Sector Strategic Assessment (WAMSSA) Assessment Strategic Sector Mineral Africa West 53738-AFR No. Report Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Environment Department(ENV) Environment Africa Region(AFTEN),and Management Unitofthe Resources andNatural Environment 31,2010 March Union Sector intheManoRiver oftheMineral Development Assessment forthe andSocialStrategic An Environmental Assessment (WAMSSA) SectorStrategic Mineral Africa West Report No.53738-AFR Document of the World Bank World Document ofthe Contents ACRONYMS, INITIALISMS, AND ABBREVIATIONS ...................................................VII ACKNOWLEDGMENTS..................................................................................................XI REMERCIEMENTS........................................................................................................XIII EXECUTIVE SUMMARY ............................................................................................... XV RÉSUMÉ EXÉCUTIF...............................................................................................XXXVII 1. INTRODUCTION......................................................................................................... 1 1.1 Background..........................................................................................................................1 1.2 Objectives of the assessment..............................................................................................4 1.3 Approach .............................................................................................................................4 1.3.1 PHASE 1 — WAMSSA INITIATION...............................................................................................5 1.3.2 PHASE 2— STAKEHOLDER ANALYSIS, SITUATION ASSESSMENT, AND REGIONAL PRIORITY SETTING .....5 1.3.3 PHASE 3— VERIFICATION OF REGIONAL PRIORITIES ......................................................................5 1.3.4 PHASE 4 — WAMSSA REPORTING AND VALIDATION.....................................................................6 1.4 Structure of this report .........................................................................................................6 1.5 WAMSSA process for participatory dialogue and analysis .................................................7 2. MINERAL SECTOR DEVELOPMENT OPPORTUNITIES IN THE MANO RIVER UNION — A MINING INFRASTRUCTURE CLUSTER APPROACH......................... 9 2.1 Key findings .........................................................................................................................9 2.2 Background........................................................................................................................10 2.2.1 METHODOLOGICAL APPROACH ..................................................................................................10 2.3 Mineral deposits and mining projects ................................................................................11 2.3.1 BACKGROUND .........................................................................................................................11 2.3.2 COMMODITIES .........................................................................................................................12 2.3.3 FUTURE COMMODITY PROSPECTS..............................................................................................12 2.3.4 MINING PROJECTS ...................................................................................................................12 2.3.5 MINING SECTOR DEVELOPMENT SHOULD FOCUS ON LOW-VALUE, HIGH-BULK MATERIALS ..................12 2.4 Major Infrastructure and environmental features...............................................................16 2.4.1 TRANSPORTATION LOGISTICS....................................................................................................16 2.4.1.1 Road network .............................................................................................16 2.4.1.2 Rail network ...............................................................................................18 2.4.1.3 Port in the three countries..........................................................................20 2.4.1.4 Electricity and energy.................................................................................21 2.4.2.1 Biodiversity.................................................................................................22 2.4.2.2 Water resources.........................................................................................24 2.4.3 TRANSBORDER ENVIRONMENTAL ISSUES ....................................................................................28 2.4.4 SOCIOECONOMIC SNAPSHOT.....................................................................................................30 2.4.4.1 Poverty in the three countries ....................................................................30 2.4.4.2 Lack of employment opportunities .............................................................30 2.4.4.3 MRU sector-wide socioeconomic issues ...................................................31 i 2.4.5 OVERVIEW OF ARTISANAL MINING IN THE MRU .............................................................................32 2.4.6 COEXISTENCE OF LARGE-SCALE, SMALL-SCALE, AND ARTISANAL MINING ........................................35 2.5 Benefits of adopting a ‘mineral-infrastructure’ cluster approach .......................................35 2.5.1 PAST EXPERIENCE WITH REGIONAL AND CLUSTER APPROACHES....................................................36 2.5.2 CLUSTER AND DEVELOPMENT CORRIDOR APPROACH — LESSONS LEARNED ...................................38 2.6.1 EAST IRON ORE DEPOSIT CLUSTER — SOUTHEASTERN GUINEA AND NIMBA AND LOFA COUNTIES, LIBERIA ..................................................................................................................................40 2.6.2 CENTRAL IRON ORE AND GOLD DEPOSIT CLUSTERS (SIERRA LEONE/LIBERIA BORDER)......................47 2.6.3 CENTRAL GUINEA AND NORTHERN SIERRA LEONE BAUXITE DEPOSITS (GUINEA/SIERRA LEONE) .........48 2.6.4 CAN ARTISANAL MINING BECOME A DEVELOPMENT OPPORTUNITY? ................................................49 2.7 Implications for AMGP.......................................................................................................51 3. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE PRIORITIES FOR MINERALS DEVELOPMENT....................................................................................................... 53 3.1 Key findings .......................................................................................................................53 3.1.1 CRITICAL ISSUES IDENTIFIED BY THE ANALYSIS AND CONSULTATION PROCESSES.............................53 3.2 Key environmental and social priorities.............................................................................55 3.2.1 BIODIVERSITY AND DEFORESTATION...........................................................................................56 3.2.2 LAND DEGRADATION AND RECLAMATION OF CLOSED OR ABANDONED MINES ...................................56 3.2.3 POVERTY IN MINING AREAS .......................................................................................................57 3.3 Key overarching governance priorities ..............................................................................58 3.3.1 INSUFFICIENT TRANSPARENCY AND CONSISTENCY OF GOVERNMENT DECISION-MAKING PROCESSES .58 3.3.2 LACK OF CAPACITY...................................................................................................................58 3.3.3 DISENFRANCHISEMENT OF LOCAL COMMUNITIES..........................................................................59 3.3.4 RENT-SEEKING BEHAVIOR AND CONDITIONS THAT DISTORT SHARED BENEFITS ................................59 3.4 Consultation processes to identify issues and select priorities .........................................60 3.4.1 STAKEHOLDER CONSULTATIONS ................................................................................................61 3.4.2 INSTITUTIONAL STAKEHOLDER FOCUS GROUPS............................................................................61 3.4.3 COMMUNITY STAKEHOLDER SURVEYS ........................................................................................61 3.4.4 NATIONAL WORKSHOPS ............................................................................................................63 3.4.4.1 Selection of priorities..................................................................................64 3.4.4.2 Comparing issues by country.....................................................................65 3.4.4.3 Differences among institutional and community priorities..........................66 3.5 Scenario analysis ..............................................................................................................67 3.5.1 REGIONAL HARMONIZATION SCENARIO .......................................................................................67 3.5.2 LOCAL GOVERNMENT/COMMUNITY PARTICIPATION .......................................................................68 3.6 Advantages and disadvantages of addressing priorities through a mining-infrastructure cluster approach ................................................................................................................69 3.6.1 DISCUSSION OF SCENARIOS ......................................................................................................69