Why South Sudan Should Go For A Mining Company With Sustainable Development Agenda: The Case of KirLand Lake Gold.
Sept 12, 2019 (Nyamilepedia)- BY: Daniel Juol Nhomngek, Kampala, Uganda. In South Sudan Minerals are owned by the state in trust for the people as stated in the South Sudan’s MINING ACT, 2012. The concept of “public trusteeship” is therefore embodied in the country’s legislation, which forms the basis of her sovereignty and duty to act as a guardian of national interests for the benefits of the nation as a whole. The concept of Public Trusteeship is entrenched in legal philosophy which dates back to ancient times.
For instance, John Locke in his Second Treatise on Civil Government (1685) stated that governments merely exercise a “fiduciary trust” on behalf of their people. Pound further suggests that the role of the state in the management of common natural resources must be limited to “a sort of guardianship for social purposes” and Karl Marx also observes that: From the standpoint of a higher socio-economic formation, the private property of particular individuals in the earth will appear just as absurd as private property of one man in other men. Even an entire society, a nation, or all simultaneously existing societies taken together, are not owners of the earth. They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations as boni patres familias.
This doctrine envisages that the natural resources are of such great importance to the people as a whole that it would not be wholly justified to make them a subject of private ownership unless in the cases where private ownership adds value for greater good of the nation. Therefore, this philosophy enjoins upon the Government to protect the resources and encourages economic partners who are able to provide factors of production to increase resource utility. It therefore implies that the government stands as the public trustee of the mineral resources within its boundaries and uses them only for public purposes. In order to use them properly and for the sole purpose of the public, there must be centralized management in form of public cooperation or national company dedicated to managing the natural resources in the interest of the public.
It is in line with the above argument that the title to this Article becomes relevant. This article looks at Kirkland Lake Gold (KLG) as an example of a fast growing modern-day mining companies to illustrate the economic importance of mining. Kirkland Lake Gold is a Canadian gold mining company with operations in Canada and Australia where it is targeting to produce 950,000 – 1,000,000 ounces of gold in 2019 from mines in Canada and Australia (https://www.klgold.com). Using current gold price of US$1,500 per ounce, Kirkland Lake Gold is able to generate a US$1.5 billion annually from its gold production. The company is focused on delivering superior value for its shareholders and cultivating a position within the mining industry as a sustainable leading gold producer. Its solid base of quality assets is complemented by district scale exploration potential, supported by a strong financial position with extensive management and operational expertise.
As provided for in its website, the production profile of the company is anchored by two high-grade, low-cost operations at the Macassa Mine located in Northeastern Ontario in Canada and the Fosterville Mine located in the state of Victoria, Australia. Their interest in high grade and low-cost mining makes South Sudan mineral industry attractive to invest in. We know from artisan miners that gold is in abundant in Eastern and Western Equatoria regions. Recent explorations and studies by our geologists (some of them who have worked for Kirkland Lake Gold in Australia) have also shown locations of high grade gold in Aswa, Kidepo, Kajo-Keji, Kapoeta, Luri and Kafia Kingi to name a few. There are high possibilities of discovering world-class ore body in these areas, which will likely be mined as an open pit thus providing cheap production cost for decades. These mines can later be extended to underground mines by advancing deeper exploration and underground developments that increase resources and reserves. This is the basis of national sustainable development, which is unlike current practice where privately own companies have leased high potential mineral tenements and fail to explore them to uncover the hidden treasures.
A company like Kirkland with the support of national and local governments and the national mining parastatals can be a strong vehicle for rebuilding the Republic of South Sudan. It has a generous contribution to local communities and governments in the areas of operation. Social, environmental and corporate responsibilities are parts of their core values. For example, the company provide equal employment opportunities for both men and women in local communities where they operates and help in building schools and hospitals as part of their social responsibility. They treat wastewater before releasing it back to the environment and pay environmental insurance in every location they operate a mine. This can help in reclaiming a mine site after operation ceased, which reduces environmental pollution and impacts such as those witnessed in the oilfields.
As explained above, KLG is one of the many international mining corporations with successful records of transforming mineral resources for the benefit of shareholders and the locals. But why should I recommend Kirkland Lake Gold to the Government of South Sudan to look into the possibility of welcoming it into the Country and where possible creates a national subsidiary company that will operate local mines and mineral tenements, just like Fosterville Operation Ltd and NT Mining Operation Ltd run the Australian mines on behave of Kirkland and the Governments of Victoria and Northern Territory respectively. Here are my reasons:
1. First of all, according to the World Bank, mining industry is a very important force in the country’s economy as it occupies a primary position in the supply chain resources. This means that there is a need for good mining company to make sure that benefits from mining trickles down to the grassroots. Looking at Kirkland’s social and environmental policies, I am made to believe that is it the kind of partner South Sudan needs at this point in time.
2. Second, proper utilization of minerals such as gold proves that it offers the economic growth not in term of income but in terms of contribution of foreign direct investments, which has been estimated to go up to 90%. Since Kirkland Lake Gold is highly based on professional operation, there is openness in the procedures which can attract direct foreign investments since through its explorations, the exact amount of minerals will be known in South Sudan that will attract foreign investors and create employment opportunities that are much needed.
3. Third, it must also be pointed out that Kirkland Lake Gold can help in promoting four segments which include: foreign direct investment, exports, boost government tax revenues through taxes and royalties and contribute to national of GDP. Many of the other companies that have operated in Africa may also be vetted on their own merits and assessed to determine if any of them matches the calibre of Kirkland Lake Gold.
In conclusion, the Government of the Republic of South Sudan has a responsibility to ensure peace and stability and to make South Sudan mineral industry attractive for international companies like Kirkland Lake Gold to contribute in the development of national resources.
The Author is a lawyer by profession; he graduated with honors in law from Makerere University, School of Law. He participated in various workshops and training in community law and community mobilization in awareness of their constitutional rights in Uganda. He is the member of Public Interest Law Clinic (PILAC) and NETPIL (Network of Public Interest Lawyers) at Makerere University; he is currently doing research with NETPIL on private prosecution; he is trained in Alternative Dispute Resolution (ADR); he participated in writing Street Law Handbook on Economic, Social and Cultural Rights in Uganda. He can be reached through firstname.lastname@example.org
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