Copper and Dana

The recent ruckus about the government’s intent upon allowing mining for copper in the Dana Biosphere Reserve (DBR) is well deserved and, speaking from a purely developmental perspective, should have been louder. Furthermore, the government discourse is focused, somewhat naively, on the possible cash flow from converting part of the country’s largest nature reserve into a copper mine, which debases the respectability of the government argument.

The DBR is about 300 square kilometre. It spreads within the Tafileh Governorate, one of the least developed governorates in Jordan. The Dana Biosphere is fantastically unique. It crosses four bio-geographical zones; Mediterranean, Irano-Turanian, Saharo-Arabian, and Sudanian penetration.  The DBR is home to 833 species of plants (one-third of Jordan’s plant species), 215 bird species (50 per cent of all the bird species in Jordan), and 38 mammal species (50 per cent of the mammal species in Jordan). Three of the plant species inhabiting DBR are unique to it, they can only be found there. Moreover, several globally endangered species find sanctuary in the area, such as the Syrian Serin (Serinus syriacus), the Lesser Kestrel (Falco naumanni), the Blandford's Fox (Vulpes cana) and the Nubian Ibex (Capra nubiana). There are about 100 archaeological sites in Dana. Among these are the ancient copper mines in Wadi Feinan, considered as the most important archaeological complex in southern Jordan outside of Petra. Based on all this, Dana is on the tentative list of UNESCO for being included among the World Heritage Sites.

The Global Environment Fund supported the Royal Society for the Conservation of Nature (RSCN) in 1994, to conserve the biodiversity in Dana. They put together the first protected area management plan in Jordan, while making the DBR a model of integrated conservation and socioeconomic development. It is, therefore, apparent why some people are deeply concerned over the current drive to mine copper in the DBR. 

On the other hand, one reason that there is such a desire, among the government and some investor(s), to mine copper now at the DBR is that the world price for copper is currently at JD6,646 per tonne, almost an all-time high; the price of copper increased by 25 per cent per tonne from 2010. It is also five times what it was at the turn of the century.  The cost of mining copper has also been raising and some place it at JD4277 per ton, or 65 per cent of the price. 

One argument in favor of mining copper in Dana is the fact that commercial reserves of copper do exist. However, there is a plethora of complexities that surround such a venture. For starters, given a span of 20 years, the price of copper may revert to its past low levels and render the venture obsolete; the government’s revenue share may be structured to balloon later instead of an earlier date, thus reducing its present value to dismal levels; the costs of mining may rise significantly, especially in a country where energy is extremely expensive; water resources may easily become polluted and a water-poor country may become even poorer (note that copper mining is considered a dirty industry and water has been regarded as its first casualty); and the environment at the DBR may be totally destroyed.  

Moreover, issues such as governance and linkages to the rest of the economy to ensure that the benefits are widespread and sustained should be evaluated. In addition, there should be a comparison between earnings (financial and economic) from the income streams from mining copper and those from having a DBR operating at its full potential. Such are some of the concerns!

Because of the above, the negotiation process should be done by professionals with tremendous experience in the subject. All future payments must be discounted to the present to determine their present value. Policies and programmes that enhance the value added of copper mining as well as other mining activities at the community, regional and national levels should be addressed. All contracts should be subject to the approval of the parliament. The development of human and institutional capacities in host communities to benefit from this should be among the priorities of the negotiation process. In other words, in order for this venture contribute to increased tax revenues, export earnings, employment opportunities, infrastructure development and transfer of technology, these issues need to enter the into the contractual agreement.

A transparent and competitive process is necessary but not sufficient; the process requires a neutral technical adviser such as the World Bank, which has provided technical assistance in 24 countries for 41 mining sectors since 1988.

Jordan, like many other developing countries, should not rush into a mining venture without estimating the socioeconomic impacts and the environmental damage, especially given that it would directly affect the magnificent Dana reserve. Receiving advice, given the current public sector capacities and the threat to DBR, is extremely important right now. Let’s not rush this time, easy solutions are not necessarily the correct ones.