Working with Guinea’s Chamber of Mines and the mining industry to enhance local development impact

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Working with Guinea’s Chamber of Mines and the mining industry to enhance local development impact

Multi-stakeholder partnership to map and fund local initiatives to foster the social and environmental sustainability of the mining sector

Challenges

Guinea is one of Africa’s poorest countries and is ranked 178 out of 189 countries worldwide according to the Human Development Index. More than 36 percent of Guinea’s 12.8 million inhabitants live on an income of less than US $1.90 per day. Mining is the predominant economic sector, based on the large-scale extraction of bauxite, aluminium and gold, and represents about 31 percent of government revenues. However, mining operations leave behind environmental damage and often create social tensions. Mining requires machinery and skills that are not locally available; thus, the jobs that are accessible for local people often have low remuneration. Hence, while mining operations contribute to aggregate GDP, they do not always foster local development and can sometimes even harm local economies. A major factor limiting the mining sector’s impact on local wealth is the absence of financial instruments to support access to domestic finance for project sponsors.

Toward a Solution

This project was implemented by the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) Guinea. The objective of the project was to strengthen the capacity of Guinea’s Chamber of Mines to play an intermediary role among the mining industry, the United Nations system and local governments to form robust and innovative partnerships to realize greater development impacts.

The project’s programmatic framework focused on issues of common concern, one being climate change adaptation, which cannot be addressed solely by individual mining companies at the local level and require national-level engagement. The framework also enabled mining sector partners to address challenges related to skills development and the creation of local employment opportunities through local content in mining supply chains at a sector-wide level. Furthermore, the project assisted in the preparation of a communication plan to engage with stakeholders (including local communities), to build awareness about a joint vision for the development of the Guinean mining sector, corporate social responsibility and local-content obligations of mining companies and the structures in place to put these into practice. The communication plan informed stakeholders about the objectives, actions and expected impacts of the project at both local and sector levels, including alignment with the Sustainable Development Goals.

Building on the achievements of an earlier project (Support for Improved Governance of Mining Royalties, – AGREM) conducted by the Government of Guinea, UNCDF, UNDP and the Guinea Chamber of Mines that focused on the promotion of inclusive, transparent and accountable practices in the management and use of resources in local government, the project also set up a local-development fund, capitalized from mining-industry contributions with additional support from the United Nations system and development banks. To promote sustainability of the project’s impacts, the local-development fund finances strategic investments aligned with the programmatic framework that have high local-development potential, using a range of financial instruments, such as matching grants, revolving grants for private initiatives, public-private partnerships, etc. When possible, the investments are used to leverage contributions from other stakeholders, such as the government, local communities and donor-funded development projects.

Extractive industries represent an important part of many economies in Africa and initiatives that can make this sector more socially and environmentally responsible can add value and create more inclusive development. The project contributed to this end by generating and testing a new funding stream to invest in local development. Through enhanced South-South cooperation within the region, this project can provide a model for replication in other African countries in which the mining sector accounts for a large share of the GDP (such as Burkina Faso, Mali, Niger and Senegal).

CONTACT INFORMATION
Ms. Christel Alvergne, Regional Coordinator, Western and Central Africa, United Nations Capital Development Fund (UNCDF)

SDG
09 - Industry, Innovation and Infrastructure

SUPPORTED BY
United Nations Development Programme (UNDP) India

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