BOOK REVIEWS

The Role of Financial Institutions in Sustainable Mineral Development

Recent well-publicised mining disasters, in particular cyanide contamination in Romania and a tailings dam failure in Spain, have highlighted the importance of prevention and swift clean-up action when disaster strikes. These types of mining accidents have also highlighted the effect on corporate balance sheets. In other cases, mining operations have been halted or new projects prevented from opening because of local community pressure. Annual general meetings of major banks have been disrupted over the banks' involvement in mining finance and NGOs have sometimes been very vocal.

Mineral exploration, mine site development and minerals and metals production are financed by a variety of institutions in various ways. The financing may be private or public, debt or equity, as well as insurance. Whatever the form, those who put their funds at risk have an increasing number of reasons to inform themselves about the mining industry's performance on environmental, social, and economic issues.

UNEP commissioned this Report on the Role of Financial Institutions in Sustainable Mineral Development in order to better understand the investment process from exploration through development to mine closure. It is important to identify the key financing stakeholders at each stage of mineral development and understand their role in the environmental and social performance of particular mining projects.

This Report identifies the main parties involved in the mining process and describes the types of financing available to mining projects. It then explains 'who is doing what' and 'who pays for what'.

There is a lack of an internationally recognized benchmarking system for mining finance banks and technical consultancy firms. More dialogue with NGOs can bring genuine improvements to environmental management and improve the image of the financial institutions and mining companies alike.

The Report concludes that partnerships and information exchange between all stakeholders are the key to sustainable mineral development and with the least amount of environmental impact from this industry which is environmentally invasive, but without which our modern civilisation cannot exist.