Impact assessments

Economic impact assessments and political economy analysis provide a vital insight into whether a development should go ahead and how it should be structured. In OPM’s experience, such insight is a vital ally in tackling the so-called ‘resource curse’ which has historically dogged resource extraction projects.

By understanding fully the potential social, economic, environmental and public health impacts of a proposed project, national governments can:

• Make informed decisions about the level of development (or further development) to allow and the amount of infrastructure investment to commit;
• Assess how much revenue the country may receive by allowing extraction, and crucially when they can expect to receive it;
• Identify what restrictions they want to place or commitments they want to secure from the mining and extraction sector.

Comprehensive economic impact assessments are equally valuable for the companies planning to invest, as they can present a picture of the likely timing of impacts (jobs, taxes, local supply chain limitations) and the practical as well as political challenges to overcome in running an extractive industries project.

OPM has conducted such assessment for countries - from Chile to Montserrat to Ghana and companies, including Minmetals Group, Rosia Montana Gold Corporation and Guinea Alumina Corporation.

In 2009, we undertook a unique study for the International Council on Mining and Metals (ICMM)  and World Gold Council, looking at the future effects of gold mining on the Tanzanian economy. This study involved an assessment of the effects of gold mines over their entire lifespan, from construction to closure, and made use of actual company data (historical and projected) for nearly all the major gold mines in Tanzania. In 2011 we are working for the World Gold Council again on a similar study on the gold mining sector in Peru.

The OPM toolkit for impact assessment – funded by ICMM

Our experience in the field recently led the ICMM to invite us to develop a consistent approach to impact assessment. Our impact assessment toolkit enables the objective assessment of both the perceived and actual benefits that result from large-scale mining. It is available for use by others as part of the ICMM’s Mining: Partnerships for Development programme, and forms the basis of impact assessments conducted by OPM – whether before an investment is made, or to help evaluate the impact.