This document summarizes the views of seven experts from around the world on the current state of the mining industry. Some key points discussed include: - Increased investment in non-conventional hydrocarbons like shale gas in countries like Ukraine and emerging economies in Latin America and Africa, with gold being a top target metal. - Mining companies facing issues like uncertain demand and rising costs, pushing more mergers and acquisitions as well as investments in technology to optimize resource extraction. - Regulatory changes in various jurisdictions aimed at simplifying permitting processes, incentivizing investment, and increasing environmental protections. Examples mentioned include reforms in India, Mexico, Ukraine, Pakistan, and Australia. - Compliance with

1. Round Table: Mining
www.corporatelivewire.com
Graham Taylor
Clayton Utz
Kojo Bentsi-Enchill
Bentsi-Enchill, Letsa & Ankomah
Juan Francisco Torres Landa
Barrera, Siqueiros y Torres Landa
Prestamo Elizondo
Santacruz Silver Mining Ltd
Taras Aleshko
Baker & McKenzie
Jatin Aneja
Amarchand Mangaldas
Zainab Aziz
RIAALAW

2. Graham Taylor - Clayton Utz
T: +61 2 9353 4169
E: gtaylor@claytonutz.com
Graham Taylor is a Partner in our Corporate Energy and Resources group and is currently the
national head of the Corporate Group at Clayton Utz. Graham runs a corporate practice which fo-
cuses particularly on the energy and resources industries. He has considerable expertise in the coal
and oil and gas sectors and has acted for a number of significant companies. Graham has experience in joint venture
arrangements, long term supply contracts, off-market mergers and acquisitions, foreign investment approvals, privati-
sations and energy and resources related infrastructure.
The Experts
Juan Francisco Torres Landa - Barrera, Siqueiros y Torres Landa
T: +5255 5091 0000
E: jftl@bstl.com.mx
Civil, Commercial and Corporate Law; Project Financing; M&Acquisitions; Foreign Trade; Arbi-
tration; Immigration Law, Environmental Law, Economic Competition- Antitrust; Mining; Taxa-
tion for Non Residents and Telecommunications.
Prestamo Elizondo - Santacruz Silver Mining Ltd
T: +1 604 569-1609
E: aprestamo@santacruzsilver.com
Mr. Préstamo Elizondo holds a C.P.A. degree from the University of Monterrey, a Master Degree
from EGADE University and professional degree from I.P.A.D.E. Business School. With more
than 7 years of executive and operational experience in the mining industry (precious metals), Mr.
Préstamo Elizondo has worked for different public companies as Director of Planning, Corporate Finance and Inves-
tor Relations. Mr. Préstamo Elizondo is former Country manager for Starcore International Mines, where he had direct
responsibility for mining, administrative, and corporate operations in Mexico. Mr. Préstamo Elizondo is member of
Mexico’s Mining Chamber, and participates actively in different mining initiatives in the country.
Jatin Aneja - Amarchand Mangaldas
T: +91 11 26920500
E: jatin.aneja@amarchand.com
Jatin Aneja is a Partner with Amarchand Mangaldas and has extensive experience in private eq-
uity, project and project finance related transactions. Jatin joined the firm in 1998 and heads the
projects team at the firm’s New Delhi office. Jatin has been extensively involved in advising clients
on a vast number of transactions in the areas of projects and project finance and is highly experienced in the oil & gas,
roads, power, mining, railways, ports and airports sectors in India.
Jatin has been rated a recommended lawyer in the projects and energy practice by Chambers and Partners in its 2008-
09, 2009-2010, 2010-2011, 2011-2012 editions, Asia Legal Business in its 2008-09 edition and Legal 500 in its 2006-07,
2008-09. 2010-2011 editions.
Zainab Aziz - RIAALAW
T: +92 21 35872879
E: zaziz@riaalaw.com
Ms. Aziz is a senior associate at RIAALAW, one of Pakistan’s leading law firms. Ms. Aziz joined the
Firm in 2009. During her time at the Firm, she has handled matters relating to natural resources
and mining, as well mergers and acquisitions, corporate advisory, finance and energy.
Prior to joining the Firm, Ms. Aziz worked as a legal analyst at Bloomberg L.P. and as an analyst with the Independent
Inquiry Committee into the United Nations Oil for Food Programme. Ms. Aziz received her B.A. cum laude from New
York University in 2004 and her J.D. cum laude from the New York Law School in 2008.
Taras Aleshko - Baker & McKenzie
E: taras.aleshko@bakermckenzie.com
Taras Aleshko is an associate in the Kyiv office of Baker & McKenzie, specializing in natural re-
sources, power and dispute resolution. Taras has a notable record of counseling clients in the min-
ing and energy sectors, starting from entry into the Ukrainian market or extension of existing busi-
nesses, through legal support of day-to-day operations and extending to negotiations or disputes
with counterparties and governmental organizations. He also advises on the regulatory aspects of mining operations,
including obtaining and protection of subsoil use rights, and representation of foreign investors in joint mining activi-
ties.
Kojo Bentsi-Enchill - Bentsi-Enchill, Letsa & Ankomah
T: +233 302 220516
E: kojo.bentsi-enchill@belonline.org
Kojo Bentsi-Enchill is the Senior Partner and Head of the Energy and Natural Resources Practice
Group of the law firm of Bentsi-Enchill, Letsa & Ankomah in Ghana.
Kojo did Post Graduate Research on Mining Concessions Law, 1874 -1962 at Magdalene College, Cambridge, where he
was awarded the J. Donaldson Bye-Fellowship, 1978-1979. . He was admitted to the Ghana Bar in 1975.
Kojo has broad experience in mining and energy issues, corporate transactions and their related security arrangements.
He has also worked on several marquee deals on the Ghanaian market and is a highly regarded corporate lawyer both in
Ghana and abroad and has a passionate commitment to providing commercial solutions to client concerns.

3. Mining
1. Can you outline the current global investment trends in exploration and mine expansion?
Aleshko: During the last year we have observed an increase in interest toward the search for alternative energy sources, which resulted in
several major trends related to investment in the mining industry. One of the main trends was investing in non-conventional hydrocar-
bons. Namely, in July 2012, Eni bought 50.01% of the joint venture LLC WestGasInvest (rest belong to Cadogan Petroleum and Nadra
Ukrainy), which holds subsurface rights to nine unconventional (shale) gas license areas in the Lviv Basin of Ukraine, totalling approxi-
mately 3,800 sq. kilometres of acreage. Moreover, in early 2013 Shell signed a production-sharing agreement with the State of Ukraine
for the Uzivska shale gas plot. There is also anticipation that the State of Ukraine and Chevron will sign a production-sharing agreement
for the Oleska shale gas plot.
Another major trend is investing in Ukraine’s coal industry. This trend emerged in late 2012 due to an increased interest in Ukrainian
coal mines and was followed by the Ukrainian Parliament adopting the Law of Ukraine on Peculiarities of the Privatisation of Coal-
Extraction Enterprises, which envisages a wide range of incentives for further commercial activities of such privatised enterprises.
Landa: Mining companies are facing several issues, such as uncertainty in the demand of minerals and the increasing cost of operations.
Consequently, companies are starting to invest in technology to enhance and optimise resource extraction. As a result, commentators
reckon more JV’s, acquisitions and mergers will occur in the near future. An important issue to consider is also the increasing resource
nationalisation in the form of direct expropriation (i.e., Venezuela) or the imposition of new taxes and royalties (i.e., Australia). Mining
companies are also structuring their investment to mitigate and cope with said risks.
Bentsi-Enchill: The rising world market price of gold has caused an increase in investor interest in exploration and mine expansion in
Ghana, particularly in the small scale mining sector. We have more investors seeking to obtain mining licences, while the existing mines
are trying to expand their activities. Also the activities of small scale mines have increased due to rising foreign investment.
Aziz: The trend of increased investment in emerging economies will continue. There is increased investment in Latin America and
Africa, with gold being the top metal mined in those regions. Investment in North America also continues to grow. In Europe (exclud-
ing Russia) the focus is increasingly on the Nordic countries; especially Finland, Sweden and Greenland. There has been a substantial
increase in investment in Mongolia, particularly for gold and copper.
With respect to Pakistan, there is an increased interest in investment in Balochistan, particularly by Chinese companies. There is also
renewed interest in coal mining in Thar region, which houses a vast lignite reserve. Iron ore, copper, gold and nickel will remain the
largest investment targets for mining companies.
Elizondo: In my opinion nowadays, investors want to see projects which are conceivable to become productive assets and not inventory
resources that have a narrow chance to become a thru cash-flow generator.
2. Have there been any recent regulatory changes in your jurisdiction?
Aneja: The proposed Mines and Minerals (Development and Regulation) Bill 2011, which is currently pending before the Indian Par-
liament, is expected to completely overhaul the extant law relating to mining in India by introducing an improved legislative environ-
ment in consonance with international best practices in the mining sector. The Bill proposes to incentivise investment in the sector by
streamlining and simplifying the procedures for grant of mining concessions by the State. The Bill also provides for a new concession
instrument for technology and investment intensive exploration exclusively for deep deposits called “high-technology reconnaissance-
cum-exploration license”. The Bill further contemplates development of Sustainable Development Frameworks by the government for
formulation of project level practices, in order to facilitate the scientific development and exploration of mineral resources and to ensure
the protection of the environment and prevention and control of pollution from prospecting and mining related operations.
Further, the Bill requires certain benefits to be accorded to persons holding occupation or usufruct or traditional rights of the surface of
land over which mining lease has been granted. The benefits include allotment of shares for consideration other than cash and payment
of compensation by the mining company to persons affected by the mining operations.
Seven leading experts from around the world share their opinions on the present state of the mining industry. We gage their views
on everything from how recent regulatory changes will alter the spectrum through to evaluating current global trends and opportunities.
India is also in the process of formulating a new shale gas development policy, which is likely to be announced in the month of April,
2013.
Aleshko: Ukrainian mining legislation is constantly developing so - if compared to other European jurisdictions - the number of changes
is substantive. Among the most interesting ones is the Ukrainian Parliament’s adoption of the Law of Ukraine On Introduction of
Amendments to Some Legislative Acts of Ukraine Regarding Limitation of State Regulation of Commercial Activity on 19 October
2010, pursuant to which it is no longer necessary to obtain commercial activities licenses for entities willing to explore or extract natural
resources in Ukraine. This simplified the situation for market players, which were previously required to hold such licenses along with
special permits for subsoil use. Such change launched a trend on deregulation and unification of mining legislation in Ukraine.
Later, on 30 May 2011, the Cabinet of Ministers of Ukraine adopted another act that significantly changed regulatory issues in the min-
ing industry – Resolution No. 615 On Approval of the Procedure to Issue Special Permits for Subsoil Use. Such act has been very im-
portant since it was the result of a long-lasting initiative by market players to simplify mining legislation by cancelling annually-changed
regulations on issuing special permits for subsoil use, as well as cancelling ineffective and unclear procedures for obtaining such permits
(simultaneously with auctions there also were tenders and competitions with no identifiable differences). What was even more impor-
tant about such act is that its adoption has clearly shown the direction being taken by the Cabinet of Ministers of Ukraine towards the
goal to unify mining legislation in Ukraine.
The most recent legislative changes are mainly aimed at liberalisation of the Law of Ukraine On Production-Sharing Agreements with a
view to signing production-sharing agreements on non-conventional hydrocarbons.
Landa: Yes. The most important regulatory changes with direct impact on the mining sector are the amendments to the Regulations on
the Mining Law and the modification to the Mexican Official Standard regulating occupational health and safety conditions for open pit
and underground mining, both published in October 2012. The new federal administration in Mexico has an ambitious structural re-
form agenda to enhance productivity and promote a more competitive environment; the first step was the approval of the labour reform
by the end of 2012. Close attention to the structural reforms is warranted, and even though not targeted to this industry per se, they will
definitely impact mining operations and the economy in general. The expectation is that Mexico is at the gate of an economic boom that
will positively enhance all types of business activities, mining included.
Bentsi-Enchill:
• Proposed income tax of 35% in national budget
• Minerals and Mining (Support Services) Regulations, 2012 (L.I. 2174))
• Delineating the classes of Support Service Providers
• Providing for benefits of the different classes of support service providers including
- concession rates of customs import duties in respect of plant, machinery, equipment and accessories
- immigration quota
- receipt of part of the payment for that person’s services in foreign currency
- restriction of service providers to Ghanaian citizens
• Transfer Pricing Regulations, 2012 (L.I. 2188)
• Regulating transactions between persons who are in a controlled relationship
• Regulating dealings between a permanent establishment and its head office
• Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176)
• Stipulating a cadastral system for the purpose of establishing mineral rights and a licensing regime for mineral rights
• Minerals and Mining (General) Regulations, 2012 (LI 2173)
• Regulating recruitment of expatriates, training of Ghanaians and preference for local products
Taylor: Recent Federal and State Government initiatives have signalled greater regulatory involvement in the energy and resources sec-
tor. In particular, the changes to water laws have meant that any CSG or large mining project that could have a significant impact on
water resources could soon need the federal tick of approval on top of state planning laws.
Tough new CSG regulations were also announced that seek to impose two kilometre exclusion zones around residential areas (both
existing and those areas marked for future growth) and “critical industry clusters” such as viticulture and the equine industry to prevent

4. new CSG exploration, assessment and production activities.
In NSW last year we saw the lifting of a 26 year old ban on the exploration of uranium deposits however, this policy reform has not yet
extended to permit the mining of those deposits.
Aziz: The government of Pakistan issued the National Mineral Policy, 2013 in February, replacing the National Mineral Policy, 1995. Al-
though the policy is not binding, the policy states that the national and provincial governments will take all administrative measures and
amend the relevant mining, fiscal and other laws to give full effect to the provisions of the Policy.
The new policy envisages greater role for the provincial government through devolution of federal corporations in the mineral sector such
as the Pakistan Mineral Development Corporation and Pakistan Gemstone Corporation. The policy also places a greater emphasis on
ensuring that exploration, development and production of Pakistan’s mineral resources is done in a manner that is environmentally sustain-
able. There is also an increased focus on infrastructure and human resource development and corporate social responsibility. The rates of
return on which Additional Profits Tax are to be levied are also specified in the new policy.
Elizondo: Not for the moment, but we expect a new tax coming into the mining industry, for around a 3%-4% on revenues. Nevertheless
part of this tax is supposed to be used for local community improvements. It is also likely that part of our investment on local communities
would be offset against this possible future tax (as we are part of these communities and we have a better understanding of their needs than
federal or regional authorities).
3. Are there any incentives for organisations which meet compliance with environmental legislation?
Aleshko: Effective Ukrainian legislation provides for mandatory compliance with requirements of applicable environmental regulation
by all entities and individuals. Therefore, compliance is a must and there are no incentives for organisations, which comply with environ-
mental requirements. However, when it comes to daily operational activities, entities complying with the abovementioned environmental
demands receive less attention from supervising authorities, which may completely suspend business activities that cause environmental
damage and initiate an annulment of special permits for subsoil use. Additionally, Ukrainian legislation also provides for strict administra-
tive and / or criminal liability for violating environmental legislation.
On the other hand, reducing the existing level of environmental influence will have a positive financial effect. Namely, such reduction will
decrease the amount of taxes levied for environmental contamination.
Nevertheless, we still believe that in future Ukrainian government will use approach, applied by another states in respect of pioneers of
energy-efficiency technologies, including reduced tax rates, subsidies from state and local budgets, as well as special customs regime for
such enterprises.
Landa: Mexico has a self-evaluation program for environmental compliance that grants the right to obtain and use a Clean Industry Cer-
tificate, which usually contains a series of prerogatives for the respective companies. There is also a wide range of instruments that foster
energy and technology adoption and innovation available for Mexican industry, usually conditioned to the compliance with environmental
legislation. Finally, different subsidies or incentives may be applicable, depending on the State or municipality where the organisation will
have mining activities.
Aziz: All provinces in Pakistan require an application for a mining lease to be accompanied with an Environmental Impact Assessment
in compliance with the Pakistan Environmental Protection Act, 1997. The applicant is also required to identify the adverse effects of the
proposed operations on the environment, and state the measures to be implemented in order to control or eliminate those effects. An ap-
plication for a mining lease is also required to contain proposals for the prevention of pollution, the treatment and disposal of wastes, the
reclamation of land and the protection of water, etc. Mining concessions require mining companies to take measures to prevent damage to
the environment, and to make good any damage caused to the environment, so far as possible, during the course of exploration or mining
operations and on the cessation of such operations.
Failure to comply with such provisions may result in the license not being granted or the license being revoked.
Elizondo: Not directly from our regulatory authorities, but it is clear that nowadays if you are not responsible, respectful and careful with
the surrounding environment, your operations will be jeopardised, and you will also be affected by higher cost on your risk insurance poli-
cies just to give a direct example on how this directly affects the Companies financial performance. In addition to this, the investment and
financial communities identified themselves better with those responsible Companies that take these matters seriously. I strongly believe
that there is no room today for Companies with a weak approach and involvement into responsible environmental compliance practices.
4. With rising operational costs, how can an organisation ensure that they keep their overheads to a minimum?
Landa: The answer to the question depends largely on the economic, regulatory and tax environment of the underlying jurisdiction.
Infrastructure constrains, cost of energy, cost of the workforce are also elements to consider in the entire financial model of a project.
Energy costs can certainly be reduced by using renewable onsite power plants (PV plants). Investing in new technology that maximises
resource output is also a way to keep a limit in the operational costs. Efficient use of water and opting for recycling technology is also a
must for mining operations.
Taylor: Costs in relation to labour and compliance with regulatory red tape are on the rise. Particularly in labour intensive industries,
companies should consider flexible work arrangements and lobby for greater skilled migration in specific industries struggling to satisfy
labour demand. Whilst Governments are likely aware of the regulatory burdens faced by specific industries, they are acutely so during
an election year, such as the case in Australia - so it is a good opportunity for companies to highlight to the Government where improve-
ments in efficiency can be achieved.
Another key company mantra is greater financial discipline. Companies will look to utilise a number of strategies to reduce costs such as
identifying cost drivers and streamlining and automating operational models. Companies should also work towards greater asset effi-
ciency by trimming the fat in supply chains and collaborating with peer companies to find cost savings.
Elizondo: Companies need to demand from themselves day to day improvements, better ways to do things on all areas, enrol their em-
ployees at all levels in the day to day decision making, and, give certain empowerment and with this keep them motivated for the long
run, different from an economic incentive which works only on a short period of time. I think that these are fundamental practices that
will translate in better operations. I have always said that a good mine should run profitable regardless of the market prices of the ele-
ments to be produced. To accomplish this a Company needs to run efficiently and stick to the basics on each area or department, the
good times on commodities prices are for saving, investing and getting the mine ready for the difficult times to come, and also to pay
back investors in a conservative way (by means of a dividend perhaps), but not to increase or add expenses to the Company by creating a
bureaucratic and robust operational and administrative teams, which will rest flexibility on difficult times. In a few words, “always stick
to the basics”. Sometimes Companies surprise them self when for the need they cut 30% or 40% their personnel and afterwards, they
realise that things run the same. We should wonder at what time, without noticing, they grew their area (cost), to such level.
5. What potential do emerging technologies have in producing alternative methods to traditional mining?
Landa: Emerging technologies in the extracting industry have proven to be of the utmost importance to (i) tap unconventional re-
sources; and (ii) reduce operational costs. Commentators reckon that two of the areas within the mining industry that have reaped more
benefits from technology are open pit mining and deep-sea mining. As technology becomes available resource extraction, optimisation
and processing will become more efficient, which will be translated into lower costs in operations and greater returns.
Taylor: Emerging technologies have the potential not just to transform traditional mining methods, but also enable mining to take place
in areas where existing technology and infrastructure simply cannot go.
In remote and outback areas, for example, the progress of mining projects can be hampered by a lack of secure and inexpensive source
of power. The deployment of small nuclear reactors (or SNRs) to power mining sites may be an option as they provide secure sources of
power, are portable and are relatively cheap to operate. SNRs are one example of how new, standardised technologies can have a signifi-
cant impact on extending the geographical reach of mining.
6. What commodities are proving to be the most valuable in the current climate?
Aneja: In India, the minerals that are easily near the surface are the ones that have been explored and are being exploited for generating
income, whereas on account of the requirement of sophisticated technology being required base and noble minerals are not explored or
exploited to their maximum potential. As reported by the Ministry of Mines, coal and lignite, natural gas and petroleum and iron ore
make the largest contributions to the minerals sector.
Landa: Gold, silver, iron and copper are the constant winners in this area. However, other minerals, such as zinc have also kept the mar-
ket busy. Natural gas and oil are also at the top. Long term natural gas contracts have been rising as consequence of the current price of
gas, especially in North America (the presence of shale gas and oil is a very relevant factor in this instance).
Aziz: Copper, gold, iron ore and nickel are the most valuable commodities in the current global market and appear to remain important
investment targets in the industry. Metals produced in very limited quantities, such as rare earths have recently attracted significant
interest as well.
Elizondo: I think that silver is without a doubt one of the most valuable. Also, another one with solid fundamentals for future apprecia-
tion is zinc.

5. 7. As mining companies continue to scour the globe in search of the next hidden gem, have you experienced any new jurisdictions increas-
ingly cropping up?
Landa: Experts as Behre Dolbear reckon that the five best jurisdictions that offer mining opportunities are: (i) Australia; (ii) Canada; (iii)
Chile; (iv) Brazil; and (v) Mexico. However, other countries located in Africa have also proved to be important jurisdictions for resource
exploration. Some of the cited jurisdictions are Equatorial Guinea, Nigerua, Kenya, Mozambique, Tanzania and DRC. However, political
uncertainty, lack of rule of law and operational bottlenecks make these last jurisdictions far riskier than the more conventional sites. Over-
all, mining investment is increasing its presence in Latin America, Africa and Australia.
Taylor: We are seeing an increasing interest in assets in developing countries. South America - Chile, Peru, Brazil and Colombia, for ex-
ample - has attracted significant levels of foreign direct investment over recent years, particularly from major resource companies. In Africa,
large resource discoveries have recently been made in Uganda, Ghana and Mozambique. Meanwhile in Asia,; Uzbekistan, Kazakhstan and
Mongolia are looking at developing gas and petroleum projects.
Interestingly, we see parallels between an increase in foreign investments in those jurisdictions and an increase in foreign government con-
tributions to those jurisdictions as well. For example, over recent years the Australian government has provided mining related assistance to
30-odd countries in Africa. I would expect both of these trends to continue more and more as governments and organisations examine the
opportunities that can come from these investments.
Aziz: There has been a substantial increase in interest in mining in Mongolia. In Pakistan, there is significant interest in Balochistan and
Thar.
Elizondo: In our case, we are focused on Mexico alone, I believe that a junior Company does not have the infrastructure to be efficiently
successful in different jurisdictions (Countries), nevertheless; there are successful stories which prove me wrong. But for us México is our
Country, where we have the knowledge and were we are focused.
8. When an organisation has undertaken an overseas mining project, how can they measure its success?
Aneja: The primary rationale behind Indian companies making investments in an overseas mining project is to source raw materials from
abroad, given the serious supply constraints in the Indian market. However, even such investments have not been free from difficulties, and
Indian investors continue to face political risks in the nature of political expropriation/nationalisation, regulatory hurdles owing to tortuous
procedures for obtaining clearance, as well as restrictions on sourcing and procurement, etc. Thus, in order to measure the ‘success’ of an
overseas mining project, Indian companies would be required to effectively assess these risks so as to identify the revenue that will be gener-
ated, as well as achieving the end objective of sourcing raw materials to India.
Landa: Success can be measured in several manners, depending on the type of organisation. Some indicators of success are: (i) time to
develop the project; (ii) amounts of reserves; and (iii) financial results of the mineral production and trading. The former are translated into
better operation costs and maximisation of profits from the underlying mining project.
However, success of a mining project may be jeopardised by several factors such as: (i) political risk, (ii) infrastructure constrains; (iv) price
risks of the commodities; (v) market risks of the commodities; (vi) environmental regulation and social impact, etc.
Elizondo: I would say that in addition to the well know metrics and valuations, if the Company proves to improve and make from that min-
ing project a more efficient to run and leverage from possible strengths and synergies that is then a successful deal.
9. Can you provide an example of an effective mining model?
Landa: An effective mining model depends largely on the legal, fiscal, regulatory, economic and political environment of the underlying ju-
risdiction. There are a couple of examples of regulatory decisions that have worked well in Mexico. A mining company can apply for a min-
ing concession through a fully-owned local subsidiary. Because the Mining Law has been designed to allow open use of the area covered
by the concession once granted, the company can then explore and exploit directly the area covered by the concession. Moreover, Mexico
currently has no mining royalties and thus has a very attractive tax regime for mining companies. While most companies would rather have
direct title to a concession, it is possible to secure the exploration and exploitation rights from a concessionaire through an exploration and
exploitation contract.
Elizondo: The challenging part of our business is that nature is always different and each deposit requires a unique approach. I would say
that the most effective mining model is the one with cost below average cost on its producing element, when compared with peers on the
same jurisdiction, and also, the one with zero accidents.
10. Securing the support of local communities is increasingly important to a mining project’s success. Are you being asked to advice on
social and environmental issues more frequently?
Aneja: With a growing focus on sustainability (both environmental and social) of mining operations, the government as well as the in-
vestors are exploring various avenues to make mining economically and environmentally attractive. Consequently, the investors have
been seeking advice on mandatory as well as voluntary environmental compliances, in order to ensure that the mining operations are
environmentally responsive and take into account regional and local sensitivities. The Indian government is also formulating policies and
legislations with a view to promote sustainable development. The need for balancing economic efficiency with protection of environment
also assumes immense significance in view of the draft Mines and Minerals (Development and Regulation) Bill, 2011 which provides for
creation of a national sustainable development framework enabling formulation of project-level practices for sustainable mining.
Aleshko: Pursuant to applicable Ukrainian mining legislation, a holder of a special permit for subsurface use must enter into an agreement
on terms of subsurface use with the State Geology and Subsurface Service of Ukraine. Such agreement is an integral part of the special
permit for subsoil use and is hardly negotiable. Such agreement envisages, inter alia, different environmental and social obligations with
respect to local communities at the location of mining project. Separately, additional social requirements may be included in the special
permit itself, as well as in the relevant sale and purchase agreement signed in the process of privatisation of a state entity.
Since we often advise our clients on obtaining special permits, as well as their amendment and reissuance (which includes re-signing
agreements on terms of subsurface use), we are often engaged in negotiating, inter alia, social and environmental terms of the agreements.
However, during the last few years, there has not been an increase in advising on social and environmental obligations since such obliga-
tions are quite standardised and neither the State nor the local communities have shown a significant increase in interest towards this
issue.
Landa: Dealing with the local communities is essential for the success of a mining project, during its planning, operation and reclamation
phases. Conflicts with the local community might jeopardise, prevent or suspend the operation of a project. One must not lose sight of
the fact that more than 50% of the territory is owned by local communities with collective ownership of the land (ejido) and that environ-
mental laws recognise the legal standing of communities affected by activities that cause or may cause damages to the environment for the
defence of their interests and rights.
Bentsi-Enchill: We have not registered any noticeable increase in the frequency of our advice on environmental and social issues. How-
ever there has been heightened interest in the mining industry generally about corporate social responsibility. A lot of mining entities,
especially the multinational ones, have been increasingly publicising their efforts at engaging with their immediate communities.
Taylor: Yes, and this is largely driven by the reputational concerns of the investor, an increasing focus by stakeholders on the social and
environmental impact of projects and rising compliance and remediation costs.
Organisations are looking to maintain a “social” licence to conduct their operations. The absence of public support for an organisation
or a project because of social and environmental concerns puts pressure on the relevant stakeholders, including regulatory bodies, to take
corrective action. In some cases, this can mean that a project cannot proceed altogether and so companies are conscious of social and
environmental issues not just because they are inherently important but also because it makes good business sense.
Aziz: Mining concessions in Pakistan require social responsibility and compliance with environmental legislation. Mining companies
are required to give preference to Pakistani citizens, particularly those from the region to which the mining concession relates. Mining
concessions require mining companies to implement measures, including appropriate training programmes in order to encourage and
promote the education and development of in modern mining skills and to equip them for employment in the mining sector, particularly
in the province granting the concession.
Mining concessions often require mining companies to make use of products or equipment manufactured or produced and services avail-
able in the province and to cooperate with local persons involved in the mining industry. Mining concessions also require mining com-
panies to take measures to prevent damage to the environment, and where some adverse impact on the environment is unavoidable, take
measures to in minimise such impact. Mining companies are also required to make good any damage caused to the environment, in so
far as possible, during the course of exploration or mining operations and positively on the cessation of such operations.
The National Mineral Policy 2013 proposes that mining companies be required to contribute an amount to be determined by the provin-
cial government annually towards the social uplift of the local population through the establishment and self-sustained maintenance of
projects like schools, dispensaries, supply of drinking water, upgrading roads etc. It is also proposed that the provincial governments use
such amounts to train Pakistanis employed in the mining sector, along with government officials in the sector.
Elizondo: I haven’t been asked to advise on this matter lately, but it is without a doubt a very important matter, which should be taken care
of since day one. Local communities need to understand and support the Companies plans and the benefits that they as communities will
have, and everyone on the community should be involved ladies and gentlemen.

6. 11. What are the key environmental issues currently facing the mining industry? Are there any potential solutions to these challenges?
Aneja: The key environmental issues currently relevant to the mining sector in India include minimising and mitigating adverse envi-
ronmental impacts, particularly in respect of ground water, air, ambient noise and land, and ensuring minimal ecological disturbance, in
terms of bio-diversity, flora, fauna and habitat.
Systemic measures are required to be taken or built-in to increase sustainability of mining operations considering its entire life cycle, in-
cluding introduction of measurable indicators of sustainable development. It is also necessary to promote consultative mechanisms with
stakeholder groups, right from pre-mining stages and up to post-closure stages to ensure the involvement and participation of various
stakeholder groups in identifying and addressing potential sustainability issues. A system of public disclosure of mining related activities
and environmental parameters, including indicators and mechanisms to facilitate formal and informal sustainability audits, needs to be
developed to ensure protection of the environment and prevention of pollution from prospecting and mining related operations.
Aleshko: Currently the key environmental issue for the Ukrainian mining industry is the use of hydraulic fracturing, which is being used
to extract unconventional hydrocarbons. This issue has been widely discussed, emphasising the possible impact on the environment,
especially in populated areas.
A potential solution for this issue lies in a balanced approach, which will allow Ukraine to adopt the best existing practice aimed at imple-
mentation of a maximum level of environmental protection, as well as to take into consideration local peculiarities and interests of in-
volved parties.
Landa: Water scarcity, proximity to protected areas, remediation of passive contamination, generation of energy through renewable re-
sources and management of mining wastes are the key environmental issues. For water scarcity, investing in exploitation, channelling,
extraction, recirculation and treating projects is essential. Remediation of passive contamination present in old mines is required to avoid
further contamination. Generation of energy through renewable resources is an alternative for remote locations. Mexican government
is strengthening the regulations for the handling of mining waste, including tailing dams and management programs, areas that mining
companies must be very efficient and technology oriented to correctly operate and comply with local rules and regulations.
Bentsi-Enchill: Environmental degradation - contamination of water bodies, use of mercury and other unapproved chemicals and defores-
tation - from the activities of unlicensed/illegal small scale miners. The most appropriate response to this problem will be a more rigorous
and proactive enforcement of environmental laws, and criminal laws in general.
Taylor: Fracking in the CSG and shale industries has become the energy flavour of the month. Some public concerns have included
ground water contamination, risks to air quality, migration of gases and the inducement of earthquakes.
Commentators have discussed the link between seismic activity in areas not known for it and the use of high pressure injection of fluid
underground related to fracking. Going forward, it’s likely that there will be a greater emphasis on geological site analyses prior to under-
taking fracking activities to identify fault lines and make adjustments to the location of potential drilling sites to avoid seismic ramifica-
tions.
One other solution that would go a long way to address some of the “image” challenges with these industries is general public education to
provide up-to-date and accurate information about the economic and environmental risks and benefits of CSG and shale production.
Elizondo: I think that the key environmental issues are the same as the last 30 years, being careful and responsible with how the chemicals
are handled and how this is confined and secured within the circuit/process including the tailings. All mining companies should be care-
ful on this matter and go beyond mandatory requirements in order to prevent any future risk.
12. Why should a company care about achieving an environmentally effective mine closure given revenue after a mine closure is no longer
available? How can a company create value on a closure?
Aneja: The Indian Bureau of Mines requires every miner to submit a Progressive Mine Closure Plan and Final Mine Closure Plan (which
is to be submitted one year prior to the mine closure) in the format and in adherence to the guidelines issued by the Indian Bureau of
Mines. The mine closure plan usually has issues including (i) proposals to be implemented for reclamation and rehabilitation of mined-
out land including the manner in which the actual site of the pit will be restored for future use, (ii) the steps to be taken for protection and
stability of tailing dam, stabilisation of tailing material and its utilisation, periodic desilting, measures to prevent water pollution from tail-
ings etc., arrangement for surplus water overflow along with detail design, structural stability studies, the embankment seepage loss into
the receiving environment, ground water contaminant if any, (iii) disaster management and risk assessment, (iv) economic repercussions
of closure of mine and manpower retrenchments, etc. The primary reason behind these is to ensure that the rehabilitation costs after the
closure are kept to a minimum and to restore physical, chemical and biological quality that is deteriorated by the mining process. Ad-
ditionally, the Ministry of Coal has introduced certain more stringent regulations dealing with mine closure of coal mines. Under these
modified guidelines, mine owners are required to open an escrow account with scheduled banks naming the Coal Controller’s Organisa-
tion as an exclusive beneficiary. Up to 80% of the total amount deposited, along with interest, may be released after every five years in line
with the periodic examination of the closure plan and the balance amount would be released after the mine closure, subject to compliance
with all statutory guidelines.
Although prima facie¸ there may not be any significant economic benefit to mine owners from preparing such mine closure plans, in-
directly, there are several economic advantages to undertaking rehabilitation activities progressively, rather than rehabilitating activities
taken up at the end of mine operations. The high costs associated with undertaking rehabilitation after mine closure, proves to be a posi-
tive incentive for mining companies to incorporate environmentally and socially sustainable measures on a continued bases during the life
of the mine operations.
Landa: Achieving a proper closure of the site is needed to limit the environmental, civil and criminal liability of the operator. Moreover,
nowadays the environmental authorisations to operate a mine will always reflect reclamation work that must be observed. Leaving a
“clean site” is required then in all cases. The analysis of the tax regime (i.e. deduction of costs) and the application of subsidies and incen-
tives for projects developed at the site after closure are key for trying to create value on a closure. The social reincorporation of the site to
the community is also considered an essential matter in those cases where the mine has been the only productive activity in the commu-
nity for a long term.
Bentsi-Enchill: In Ghana, mining companies are required to post a reclamation bond designed to ensure an environmentally friendly
mine closure. The bond is therefore an incentive to manage closure of a mine in an environmentally friendly manner.
Elizondo: A mining Company should not relay on its on-going revenues to execute a proper and responsible closing. All mining Compa-
nies should keep always a provision for this since day one, sufficient enough to cover with the expected mine life, the cost of closure.
13. The mining industry has always been a predominantly male environment but is there an opportunity for women?
Landa: Since the late 1990s the presence of women at mines has grown substantially in all positions, from machine operators, drillers,
supervisors, geological and environmental engineers, etc. New mining techniques do not necessarily require physical strength, but rather
the ability to operate sophisticated and high productivity machines. In 2012, the first mining company was certified as a Gender Equity
Model before the Women Mexican Institute.
Taylor: We are seeing improvements in workforce diversity in historically male dominated industries. It has been reported that the West-
ern Australian resources sector has seen a strong increase in the number of women gaining employment and companies are actively work-
ing to encourage women to feel welcome and needed in the industry.
One example of this is an organisation that approached local women suggesting that, as between school drop-offs and pick-ups there’s five
hours of productive time, they could seek employment to drive a truck during these hours.
Given the changes in company attitudes and the real push to implement a broad range of initiatives to ensure a flexible workplace accessi-
ble to all Australians, I expect that over the next few years the figures regarding female representation in the mining industry will continue
to improve.
Aziz: The mining industry in Pakistan is predominantly male and there are next to no opportunities for women on the mining site. There
are, however, opportunities for women off-site, i.e. preparing the application for a mining license and all other relevant documents, nego-
tiating the terms of the license on behalf of the provincial government, working for mining companies off-site etc.
Elizondo: Sure, women are very good in the industry. In the past, most of the works on the mine were executed with more intensive
physical demand as tools and equipment’s were more mechanical hard to work with. Nowadays, modern equipment is automated and
more precision is needed to get the most efficiency from them, and here the women have a significant advantage over us, along with an
ability to operate hauling equipment.
14. What key trends do you expect to see over the coming year? In an ideal world what would you like to see implemented or changed?
Aneja: In the coming years, mining industries are likely to feel the pressure of increasing capital as well as operational costs, and a fall in
the commodity prices. Overall, mining companies are expected to face volatility and market uncertainty. However, in the long run the
prospects for mining companies remain positive as governments around the globe have started introducing progressive policies keeping
in mind the present day economic and social conditions to provide a fillip to the mining sector.
In an ideal world, there is a need to have a transparent and uniform legal and regulatory regime, together with a time based approval pro-
cess, in order to ensure that the economic interests of mining companies are well balanced with sustainability issues.

7. Aleshko: As any other important institution, Ukrainian mining sphere requires systemic approach based on phased action plan, which
will primary concentrate on the most critical issues. As an example of such issues, the Ministry of Ecology and Natural Resources of
Ukraine proposed new draft Subsurface Code, which, if adopted by the Parliament, would provide for significant positive changes to ex-
isting mining legislation. Among other things, this draft solves one of the biggest problems of subsurface users – the possibility to secure
their financial obligations.
Pursuant to the currently applicable Ukrainian legislation, holders of a special permit for subsurface use may not transfer rights granted
under such permit to any other legal entities or individuals (including transfer of such rights to the charter capital of a legal entity or
contribution to joint activity). Such prohibition in practice means that subsurface users cannot obtain adequate financing from financial
institutions since the latter ones will not accept the special permits as a securing instrument.
The draft Subsurface Code envisages that there will be no more special permits for subsurface use and the rights for subsurface use will
be provided under agreements on subsurface use, which may be used as financially securing instruments. Application of such approach,
along with effective means of protection of subsurface use rights from fraudulent actions, will provide benefits to the whole market.
Another necessary change concerns transparency of whole system of granting of subsurface use rights and availability of data on sub-
soil resources. To be more specific, entity willing to perform mining activities in Ukraine will have to go through bureaucratic loop in
order to obtain initial information on perspective deposits or possible business partners. A unified database containing information on
schedule of auctions, perspective deposits and owners of explored deposits, granting equal access rights to all parties, would become an
irreplaceable tool for investors.
Landa: Deep seabed mining seems to be the next mining investment frontier. More and more companies are interested in exploiting
multi-metallic nodules and sulphide deposits. However, regulatory issues and uncertainty in deep seabed mining seem to be the main
obstacles to surmount for this type of investment, along with the high operating costs of engaging in this type of operations.
What would be also ideal to see implemented in Mexico, is a commodity mercantile exchange, where traders can freely exchange miner-
als and other type of commodities, such as metals, grain, natural gas, etc.
Taylor: We are seeing a large number of state owned enterprises from Asia investing globally in minerals, oil and gas and sovereign
wealth funds from the Middle East investing in food and agriculture. The key focus is not always the financial return on these invest-
ments but also securing future supply of the relevant resource.
Ideally, Governments should consider and revisit (if necessary) their foreign investment policies in light of the increasing investment
by state owned enterprises and sovereign wealth funds. Investment policy needs to consider the changing trends and accurately reflect
commercial and political objectives whilst balancing domestic sensitivities.
Aziz: The National Mineral Policy 2013 suggests that federal and provincial governments in Pakistan will focus on the development of
new technologies for conversion of existing mineral resources into viable economic resources and the up gradation of the indigenous
technology through research and adoption of technological innovations abroad. The terms of the policy also suggest that efforts will be
directed to evolve low capital and energy saving processing systems. The federal and provincial governments appear intent on strength-
ening research organisations for development of processes for beneficiation and mineral elemental analysis of ores and ore dressing
products.
We expect to see an increased interest in carrying out mining activities in the province of Balochistan. It is envisaged that a lot of min-
ing exploration applications will be made by Chinese companies, especially since the Gwadar port in Balochistan is now being operated
by a Chinese company.
With respect to Pakistan, we would like the application process for mining licenses and leases to be handled in a more professional man-
ner by the relevant authorities. In particular we would like to see negotiations on behalf of the Government of Balochistan to be under-
taken in a competent manner by appropriately qualified government officials, lawyers, and consultants to avoid a repeat of the Reko Diq
litigation where the provincial government was held to have acted outside the scope of its legal powers in entering into certain contrac-
tual arrangements with the license. As a result of the litigation, the licensee (a joint venture of Barrick Gold and Antofagasta) was not
granted a lease in spite of having made substantial investment in exploration and discovery of copper and gold deposits in Reko Diq.
Elizondo: I would like to see a more educated society with regards to the mining industry, in order to understand better that this is a
great industry to create a better living for those poor communities where sometimes the authorities can not get into in an efficient way.
Also, to understand that this is a very environmentally responsible industry.