Mineral Governance and Local Sustainable Development

As the demand for certain natural resources such as rare earths or lithium will continuously grow, local communities are likely to face more grievances caused by e.g. environmental degradation, dispossession or structural labor market shifts.  A more systematic understanding on the contextual factors capable of promoting more sustainable forms of resource extraction and of preserving local livelihoods is imperative for the formulation of effective preventive measures by host governments, extractive firms and mining communities.

I therefore decided to take a closer look at institutional conditions under which extractive industries are likely to prompt local grievances. One key finding of our research is that property rights regimes need to be taken into account when addressing the resource-conflict nexus. Among other results, we found that multinational resource extracting companies – especially when operating under insecure legal and political environments – produce more social dissent and state repression compared to local, state-owned firms. Our additional analyses reveal that the promotion of various forms of local grievances including food and nutritional insecurity, labor market inequalities or poor socio-economic outcomes may explain why international oil or mining firms may prompt local conflict. Domestic resource-extracting companies, in contrast, seem more capable of improving regional socio-economic well-being. Focusing on Chinese investments in Africa, our research also shows that Chinese mining companies are less likely to generate local employment opportunities in Africa compared to non-Chinese firms.