Leon advocates transparent relationship with governments

5th March 2013 By: Martin Creamer - Creamer Media Editor

JOHANNESBURG (miningweekly.com) – Mining companies should maintain a transparent relationship with governments and help them appreciate the potential value of their projects, Webber Wentzel’s Africa mining head Peter Leon said on Tuesday.

Addressing the MineAfrica Investing in African Mining Seminar at the Prospectors and Developers Association of Canada’s International Convention, Trade Show and Investors Exchange, in Toronto, Leon expressed the view that transparency and close communication would mitigate the risk of governments intensifying resource nationalism, the umbrella term for exercising greater control over natural resources with the object of deriving a greater share of the economic benefits that accrue from their extraction.

He also expressed the view that foreign mining investors would remain welcome if they engaged in infrastructure development and made themselves integral to the development process.

He urged companies to increase their “social licence to operate” by adopting sound corporate social responsibility strategies, for example, developing healthcare initiatives, building schools and investing in other community projects.

Investors could also seek opportunities to partner with host governments and increase the State’s stake in the private sector’s success.

He described diamond giant De Beers’ 50:50 joint venture with the Botswana government as being a singular success.

The overarching challenge was to strike an equitable balance of interests, ensuring that mining was productive and profitable, as well as being fair to foreign investors, host States and affected local communities alike.

The Model Mine Development Agreement developed by the mining law committee of the International Bar Association was designed to assist parties to strike that equitable balance, which could serve as a helpful template for negotiations, Leon added.