Leveraging extractive industries for economic development The Resource Corridor Approach and its application in Balochistan Kazim Saeed Balochistan Mining Sector Technical Assistant Project Workshop on International Norms in Large-Scale Mining September 27 – 28, 2011 – Islamabad Pakistan

Presentation Outline ‘Project-by-project’ approach vs. Resource Corridor approach Example: emerging Resource Corridors in Afghanistan Potential Resource Corridors in Balochistan How the Resource Corridor Approach works – Building blocks – Institutional framework – Financial flows Conclusion

Resource corridor: A clearly defined geographic area hosting mineral development with -a need for infrastructure shared by multiple projects -a possibility of leveraging the development for diversified economic activities ‘Project-by-project’ vs. resource corridor

In-house functions Power plant Rail/road transport Staff colony, school, clinic Processing facility Mine Water supply SINGLE PROJECT Resource corridor: A clearly defined geographic area hosting mineral development with -a need for infrastructure shared by multiple projects -a possibility of leveraging the development for diversified economic activities ‘Project-by-project’ vs. resource corridor

In-house functions Power plant Rail/road transport Staff colony, school, clinic Processing facility Mine Water supply SINGLE PROJECT In-house functions Power plant Rail/road transport Staff colony, school, clinic Processing facility Mine Water supply PROJECT 2 In-house functions Power plant Rail/road transport Staff colony, school, clinic Processing facility Mine Water supply PROJECT 3 Resource corridor: A clearly defined geographic area hosting mineral development with -a need for infrastructure shared by multiple projects -a possibility of leveraging the development for diversified economic activities ‘Project-by-project’ vs. resource corridor

In-house functions Power plant Rail/road transport Staff colony, school, clinic Mine projects & processing Refining facility Town, educ/health systems Processing facility Mine Water supply system Rail/road transport services Power supply Out-sourced services Water supply SINGLE PROJECT RESOURCE CORRIDOR APPROACH Resource corridor: A clearly defined geographic area hosting mineral development with -a need for infrastructure shared by multiple projects -a possibility of leveraging the development for diversified economic activities ‘Project-by-project’ vs. resource corridor

The ‘Project-by-Project’ Approach Traditional focus has been on establishing good governance of mining Project by Project Approach Local/Regional Economic Development Infrastructure and Transport Options Community Development Agreements & Outcomes Social & Human Development Dispute Resolution Collection of taxes & revenues management Environmental Management Licensing & Contracts Discovery & Depletion

The Resource Corridor Approach Traditional focus has been on establishing good governance of mining Resource corridor approach goes further by also focusing on governance of the resource corridor Resource Corridor Approach Local/Regional Economic Development Infrastructure and Transport Options Community Development Agreements & Outcomes Social & Human Development Dispute Resolution Collection of taxes & revenues management Environmental Management Licensing & Contracts Discovery & Depletion Development & Diversification

Aynak Copper (2010) Hajigak Iron Ore (2011) Dushi Gold (2010) Amu Darya Basin(2011) Example: Resource Corridors in Afghanistan

Aynak Copper (2010) Hajigak Iron Ore (2011) Dushi Gold (2010) Amu Darya Basin(2011) Example: Resource Corridors in Afghanistan

Year 2 Input: Power or water Economic diversification, clusters Map Legend Mine Zone of Economic / cultural impact Output Infrastructure Example: Resource Corridors in Afghanistan

Potential Resource Corridor in western Balochistan Two ‘anchor tenants’ Other copper-gold projects likely Common infrastructure needs Need for economic linkages for local communities and for Balochistan Map: Courtesy of Lake Resources Map: Courtesy of bencorp.com

Building blocks of a resource corridor INDUSTRY (& FINANCIAL COMMUNITY) Traditional roles -develop and operate mines & related facilities -generate employment, community investments CITIZENS & NGOs Traditional roles -Advocacy -Community representation GOVERNMENT Traditional roles -promote resource -regulate mines, -develop infra- structure

Building blocks of a resource corridor INDUSTRY (& FINANCIAL COMMUNITY) Traditional roles -develop and operate mines & related facilities -generate employment, community investments Additional roles -Public-private partnerships for infrastructure -Community development CITIZENS & NGOs Traditional roles -Advocacy -Community representation Additional roles - Implementation partners for diversification & skill build-up GOVERNMENT Traditional roles -promote resource -regulate mines, -develop infra- structure Additional roles -Convene the partnership -Develop baseline, plans, targets -Monitor (progress, financial flows, skills, etc.)

Regional Resource Corridor DevelopmentAuthority Provincial Level District Level District I District II Other Districts Community Level Community Plans and Comm. IComm. II Other Comm. Regional Development Plans and Projects Sector Plans and SME development Master Plans (water, power, forestry, etc.) Institutional framework for a Resource Corridor Broader administrative and management systems needed for effective resource corridor development Plans and Projects Community

Financial flows for leveraging economic activity Central Treasury Federal Government Provincial Level District Level Community Level Provincial Government District I District IIDistrict III Mine Terminal / Port Resource Corridor

Financial flows for leveraging economic activity Central Treasury Federal Government Provincial Level District Level Community Level Community I Provincial Government Resource Corridor Development Authority District I District IIDistrict III Community IICommunity III Mine Terminal / Port Resource Corridor

The Government of Balochistan needs to develop the vision Government and the strength of its institutions drive resource corridor approach Development of mining sector is long-term The Government needs to develop the vision – Develop monitorable indicators and outcomes – Make the right choices early and be aware of the choices available in future – Connect the infrastructure developments across Balochistan and beyond Persist