Sector Programme
    Extractives and Development
    Kupfer-Zink-Mine Antamina in Peru

    Local Value Addition LION - Local Investment Opportunities in Natural Resource Projects

    Local Investment Opportunities in Natural Resource Projects (LION) is a tool for modelling procurement expenditures in natural resource projects. It visualises the amount of money mining companies spend on services and goods. This shall show local policymakers and suppliers the large supply potential in the natural resource sector. LION was developed by the Sector Programme “Extractives and Development” as part of the work on local value addition.

    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.

    Coppermine Zambia

    LION in the Copperbelt

    “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

    CAMION EN MARCONA

    LION in West Africa

    “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

    Local Value Addition
    GEOLOGIA MINERA BATEAS

    Assessing the economic viability of mineral deposits

    The toolkit provides competent mining supervisory authorities with guidelines for a first assessment of the profitability calculations presented to them for planned projects for the extraction of mineral raw materials.

    Local Value Addition
    Neuer Inhalt (1)

    Construction Raw Materials

    Construction raw materials can be a powerful driver for local value addition. The Sector Programme conducts activities to supports the development of responsible construction raw material sectors.

    Local Value Addition
    Abbau mit schweren Maschinen

    Local Procurement Reporting Mechanism (LPRM)

    Sustainable economic growth requires the diversification of the local economy, the establishment of supply chains and the targeted promotion of small and medium-sized enterprises. To strengthen local procurement in the long term, the Mining Local Procurement Reporting Mechanism (LPRM) was developed.

    Good Governance
    Engineers at an open pit mine in Peru

    Extractive Industries Transparency Initiative (EITI)

    The Extractive Industries Transparency Initiative (EITI) advocates for greater financial transparency and accountability of public revenues in the extractive sector. Read here how the Extractives and Development Sector Programme is involved.

    Good Governance
    PLANTA DE FUNDICION DODE RUN - Kopie

    Tax Compliance in the Extractive Sector

    An effective tax framework – strengthened through tax policy reforms and rigorous tax audits – is a critical prerequisite for exploiting the full tax potential of a country. In order to enhance domestic resource mobilization in partner countries, Germany supports the capacity building of tax authorities to identify tax risks and to investigate suspected cases of aggressive tax avoidance and tax evasion.