The Value of Community Contributions in the Australian Minerals Industry

Introduction

2.1 Background

This report outlines the results of research (‘the research’) commissioned by the Minerals Council of Australia (MCA) to capture the dollar value and understand the types and forms of statutory and discretionary company spend on activities that may be of benefit to the Australian community.

The MCA represents Australia’s exploration, mining and minerals processing industry, nationally and internationally, in its contribution to sustainable development and society. The MCA’s stated strategic objective is to ‘advocate public policy and operational practice for a world-class industry that is safe, profitable, innovative, environmentally and socially responsible, attuned to community needs and expectations.’1 MCA members produce more than 85%of Australia’s annual mineral output. The research provided in this report forms part of the MCA’s response to increasing public scrutiny regarding the extent to which Australian society, and mining communities, are sharing in the benefits of minerals development.

The MCA has contracted Banarra to undertake this research on its behalf. Banarra is an Australian- based firm providing specialised services in designing, implementing and auditing standards across a range of sectors, particularly in the fields of sustainability, community relations and human rights management. Building on an extensive body of work across the resources sectors in Australasia, South America and West Africa at the operational, corporate and industry body levels, Banarra has a unique understanding of practices across the sector.

In preparation for this research, Banarra undertook a pilot study exploring definitions of community contributions in the Australian gold sector and estimating their value. A report on the findings of this pilot study was delivered to the MCA in February 2013, titled Community Contributions by the Australian Gold Mining Sector - Pilot Study. The key findings from the pilot study informed the design of the methodology and scope for this research. Further detail on this can be found in Section 6 of this report, and references to the pilot’s findings are included throughout the analysis where relevant. 

2.2 Objectives and scope

The research presented in this report is primarily intended to assist the MCA to better understand how some of the benefits of minerals development are shared amongst mining communities and broader Australian society in the form of ‘community contributions’. A secondary aim of the research was to explore how community benefits are tracked, measured and reported by the minerals sector.

The total economic value distributed by the minerals industry to Australian society was not considered by the research and, therefore, data in areas such as taxes and royalties, most operating costs, employee wages and benefits, and payments to providers of capital were not collected. The research scope was limited to the 2011-12 financial year (FY11/12) and companies were surveyed for Australian operations and Australian spending only.

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