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Community Development Agreements

Lucas Moalusi, 2015 International Mining and Oil & Gas Law, Development, and Investment

The subject of development of mine impacted communities has become an issue of concern in most developing countries. As a result, the issue has rightly received increasing attention in recent years both from governments and mining companies. This has also resulted in community development programmes achieving prominence in the corporate social responsibility (“CSR”) activities of mining companies.

Although the mining industry contributes significantly to the economies of various developing countries, host mining communities are often the most impacted by the negative externalities of mining operations. In an ideal world these host communities should benefit from the extraction of finite natural resources. However, the reality of the situation is that the benefit of a positive economic contribution from mining operations is negated by the negative effect that mining has on local surrounding communities.1 Host communities in most developing countries do not benefit from any socio-economic development initiatives nor are the royalty taxes paid by mining companies to the host communities' respective governments seen to be utilised for the benefit of these host communities.

Agreements between mining companies and host communities are becoming more common in most developing countries as a means of addressing development in these mine impacted communities. These agre