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Corruption in the Mining Sector: Preliminary Overview 381
(TI 2008). Despite the known limitations of such indices, the high instance
of perceived corruption in international mining does suggest that the sector
needs to be carefully controlled to minimize the corruption risk.
Mining Sector Stakeholders
The mining sector involves a broad range of stakeholders:
• The government owns the mineral rights and grants licenses to use land
for exploration and mining.
• Mining companies explore for and mine the minerals.
• Contractors and suppliers are appointed by the mining company to
undertake one or more of the following on a subcontract basis: (a) geological
surveys; (b) construction of the mine infrastructure (access
roads, mine buildings, housing for the miners, schools and clinics for the
mine staff and families, and so on); (c) excavation services (for example,
earthworks, boring, or drilling); (d) transportation of minerals from the
mine to their destinations (by road, rail, or sea); (e) provision of consumables,
food, and so forth; and (f) provision of mining equipment
(such as excavation equipment, crushers, lifts, conveyors, trucks, and
drills).
• Local inhabitants may have arrangements with the mining company to
use their land, pay them compensation, and provide them with services.
• Utility companies provide services to the mining companies such as
power, water, and telephone. In practice, however, most mines are in
remote areas, so mining companies usually provide their own electricity
generators and water pumps and use mobile phones.
• Employees of the mining companies work at the mine and provide
administrative and support services.
• Purchasers buy the minerals from the mining companies.
A Sector Prone to Corruption
Globally, the mining sector is prone to corruption for several reasons:
• Significant values are at stake. A successful mine can produce extremely
large quantities of minerals for many years. The high values at stake
make mining vulnerable to corruption. On the supply side, the mining
company could realize significant long-term profits if granted a mining
license on advantageous terms. A bribe of many millions of dollars may
represent only a fraction of the company’s potential profit. On the