Shared-Use Mining Infrastructure: Why It Matters and How to Achieve It

For many countries in sub-Saharan Africa, the effective exploitation of natural resource wealth is vital to their future economic development. With bulk mineral deposits located in remote and poorly-explored regions, the infrastructure (particularly rail and port) necessary to exploit them is typically very costly. We argue that such infrastructure, once constructed, is critically important in enabling host governments to maximize resource rents and achieve broad-based economic development. In sub-Saharan Africa, large greenfield mines have historically been developed as “integrated” projects in which both mining and infrastructure operations remain under the exclusive and largely unrestricted control of a “first mover” mining firm. We consider the implications of this model, and examine the cases for and against imposing “open access” regulation on bulk mining infrastructure. The paper ultimately concludes that host governments in sub-Saharan Africa should, in almost all cases, impose regulation requiring open access to such infrastructure. We stress that care must be taken to ensure that such regulation is effective and workable, and that the need for greater expertise and capacity in this area should not be underestimated.

Published January 22, 2016