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Shared†use mining infrastructure: Why it matters and how to achieve it

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  • Paul Collier
  • Glen Ireland

Abstract

This article considers the cases for and against ‘open access’ regulation of rail and port logistics infrastructure used by ‘bulk’ mining operations, arguing that host governments should proactively impose and then enforce such regulation in almost all cases. The logistics infrastructure needed for this type of mining activity is of critical importance. The costs and potential inefficiencies involved in duplicating such infrastructure confer a significant competitive advantage on its owner in the absence of effective access regulation. In particular, where a first mover develops an ‘integrated’ project incorporating a mine and associated infrastructure, a failure to impose access regulation discourages third†party investment in mineral exploration and development in the region serviced by the infrastructure, due to the risk of hold†up by the first mover. An unregulated first mover can also use its infrastructure advantage to capture the state's share of resource rents from the mineral endowment of the region. Open access regulation further benefits host countries by enabling broad†based economic development through the shared†use of mining infrastructure with other sectors (e.g., agribusiness). The article highlights contrasting experience with access regulation in Australia: the Pilbara iron ore region has seen protracted disputes involving mining firms and policy†makers and very few examples of third†party access, while in the coal region of central Queensland an extensive multi†user, multi†purpose railway network operates independently of mining firms. The authors urge governments in sub†Saharan Africa (in particular) not to underestimate the internal capacity and other challenges associated with developing and enforcing open access regulation of mining infrastructure in a manner that protects their national interests.

Suggested Citation

  • Paul Collier & Glen Ireland, 2018. "Shared†use mining infrastructure: Why it matters and how to achieve it," Development Policy Review, Overseas Development Institute, vol. 36(1), pages 51-68, January.
  • Handle: RePEc:bla:devpol:v:36:y:2018:i:1:p:51-68
    DOI: 10.1111/dpr.12231
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    Cited by:

    1. Andrei Sulzenko & Katharina Koch, 2020. "Governance Options for a Canadian Northern Corridor," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 13(27), November.
    2. Luisito Bertinelli & Arnaud Bourgain, 2021. "Impact of mining boom on the quality of public goods in Sub-Saharan Africa," DEM Discussion Paper Series 21-13, Department of Economics at the University of Luxembourg.
    3. Zhang, Hong & Nguyen, Hoang & Bui, Xuan-Nam & Nguyen-Thoi, Trung & Bui, Thu-Thuy & Nguyen, Nga & Vu, Diep-Anh & Mahesh, Vinyas & Moayedi, Hossein, 2020. "Developing a novel artificial intelligence model to estimate the capital cost of mining projects using deep neural network-based ant colony optimization algorithm," Resources Policy, Elsevier, vol. 66(C).
    4. World Bank Group, 2018. "Sierra Leone Economic Update, June 2018," World Bank Publications - Reports 30032, The World Bank Group.
    5. Takam Tiamgne, Xavier & Kalaba, Felix K. & Nyirenda, Vincent R., 2022. "Mining and socio-ecological systems: A systematic review of Sub-Saharan Africa," Resources Policy, Elsevier, vol. 78(C).

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