Foundations in the mining industry : characteristics, structure and exit strategies

• Main Author: Lounsbery, Tara Lee Ashworth
• Language: English
• Published: University of British Columbia 2011
• Online Access: http://hdl.handle.net/2429/39775

Community social investment (CSI) is often part of the sustainable development efforts for mining companies, especially in remote areas or in developing countries. One vehicle for CSI is to establish a foundation, trust or fund (FTF). This thesis explores the FTF structures, with specific focus on exit strategies. Research focused on questionnaire respondents from twelve mining companies or foundations, twelve interviews conducted with representatives of companies, foundations and industry, and various public documents. A mixed-method qualitative approach was taken in analysis, focusing on trends emerging from the data, especially in the interviews conducted by the researcher. There are various types of FTFs, with existing typologies defined by programmatic method, focus or key attributes. In this research, the author focused on considering FTF types by closure or exit strategy, and presenting some of the key attributes in relation to these exit strategies. The key attributes that should be aligned with the exit strategy include the financing mechanism, the project selection method, and the governance and management functions. Although it is not yet standard practice within the industry, designing the FTF structure for closure is considered leading practice. Currently FTFs tend to plan for closure on a project-by-project basis. Transition is a natural feature of FTFs, whether due to the progression of mine life cycle stages, changes in government, local capacity, or other factors. Strategic plans help to smooth these transitions and facilitate the closure process. Foundations, trusts and funds provide a unique opportunity to build specialized expertise in an independent structure from the supporting mining companies. This independent structure can facilitate the development of partnerships with multiple stakeholders, an area which was identified as significantly contributing to sustainable results as the partners pool resources and expertise. The independent structure of an FTF also tends to facilitate the involvement of the community, without which community social investment struggles to find true ownership and sustainability. While mining companies should consider the pros and cons of the FTF structure relevant to the local context and business objectives, the FTF structure offers distinct advantages as a vehicle for CSI. === Applied Science, Faculty of === Mining Engineering, Keevil Institute of === Graduate