2007, The World Bank
Mines are often the key economic engines of the communities in which they are located. Evidence to date shows, however, that in many countries the positive impact of foreign direct investment on local communities is often extremely limited due to the lack of automatic spillover effects. However, with appropriate local economic development (LED) instruments, mining projects could bring more than their own direct employment to a community. By voluntarily participating in or even driving a LED program in a community, mining companies and other local stakeholders (local government, education institutions, other businesses) can work together to ensure that the local population, including the poorest segments, can benefit from the presence of new investments and share in the growth potential of the local economy. Importantly, LED strategies and programs are increasingly been seen as an entry point for national level reform especially in countries with weak national government and limited private sector development (FSU, Africa).
For the Mining Industry more specifically, a successful LED program would improve community and employee relations, develop supplier linkages, reduce dependence on the mine for local economic wellbeing over time as well as bring substantial benefits in terms of reputation and good corporate citizenship.
There has been considerable relevant experience in the EU, particularly in declining coal and steel areas, as well as experience in northern Mexico, Morocco and elsewhere that provides lessons that can be adapted in the context of mining investments.
