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Local Value Addition LION - Local Investment Opportunities in Natural Resource Projects
Through the large procurement demand shown in the mining sector, LION shall contribute to an increased rate of local procurement and thus also to sustainable economic development. LION uses primary data on the cost allocation of mining companies' procurement expenditures and links these to their cash operating costs. In this way, LION models the market for supply products in the extractives sector such as energy, spare parts and sulphuric acid. This unprecedented set of information is an important puzzle piece in promoting local value addition. The data obtained serves as an information basis for effective policy-making and for supporting local economies for example by supporting the initiation of joint ventures between locally producing companies and internationally established technology providers. LION can thus contribute to broader economic development by, on the one hand, strengthening the local economy by identifying new markets and, on the other hand, making local governments aware of the importance of increased local value creation. Against the background of the changing conditions in the natural resources sector due to greater automation and digitalisation, strengthening the local economy becomes increasingly important, so that resource-rich countries in the Global South can sustainably benefit from their resource wealth.
Initially, LION was developed for gold mining in West Africa (Ghana, Ivory Coast, Burkina Faso, and Mali). By now, Guinea, Liberia, Mauritania and Senegal have also been included, so that the cash operating costs covered in LION for West Africa in 2021 amounted to around USD 5.8 billion. From these, LION identified around USD 4 billion as procurement expenditure. In summer 2018, LION was expanded to the African Copperbelt (DR Congo and Zambia) as part of a field study. For those two countries, the cash operating costs covered in LION amounted to more than USD 5.6 billion in 2021. LION identified around USD 3.7 billion as procurement expenditure. These and many other results of LION can be accessed on these pages.
“The LION tool bridges a major information gap by providing real time historical operational expenditure data. This is an important set of data, so far not accessible in an aggregated form, key for policy makers and businesses to help them better plan supply chain development. The visualization tool is particularly useful to help assess market potential at a national and regional level. “
Isabelle Ramdoo, Deputy Director at the Intergovernmental Forum on Mining, Minerals and Metals for Sustainable Development
“The LION tool is an extremely useful and innovative instrument, which holds the potential to serve several objectives. In particular, this tool can used to assess which upstream activities should be prioritised as part of local content strategies, in addition to revealing the potential transversal linkages between the mining supply sector and others sectors, which can be useful in the context of a diversification strategy.”
Dr. Amir Lebdioui, Development Economist at the London School of Economics