| The IFC is expanding its role in sustainable | | | | investments, Karsten Fuelster says: “We have |
| development of mining in Asia and this year is | | | | recently invested in Far East Energy Corporation, |
| focusing on South East Asia, particularly Papua | | | | a coal bed methane exploration project in China, |
| New Guinea, the Philippines and Indonesia. | | | | promoting cleaner energy technology in a country |
| IFC senior investment officer Karsten Fuelster, | | | | that seeks to produce energy in ever cleaner |
| based in Jakarta, says each of these countries | | | | ways.” |
| has significant mining prospects but they also face | | | | A sustainable approach to mining is no longer an |
| challenges such as developing regulatory | | | | altruistic endeavour – it is a business |
| frameworks and evolving social and environmental | | | | imperative. IFC points out that mining companies |
| standards. | | | | are guests in remote impoverished areas, often |
| IFC is a member of the World Bank Group and its | | | | for 20-40 years. To ensure long-term success, |
| role is to finance private sector projects in | | | | mining operations must be strategic, transparent |
| developing countries. It acts as a partner to | | | | and equipped with qualified human resources to |
| achieve international standards in corporate | | | | address the challenge of making mining sustainable |
| governance and environmental and social | | | | in the long-term. |
| practices. Its objective is poverty alleviation | | | | IFC has developed performance standards for |
| through private sector investments. | | | | corporations covering social and environment |
| Karsten Fuelster says: “We are looking at | | | | assessment and management systems. Effective |
| investment opportunities where our global | | | | local stakeholder management happens by design |
| environmental and social expertise can help mining | | | | and many problems are avoidable with good |
| companies implement projects in challenging | | | | planning, starting as early as during the exploration |
| environments and where we can act as a | | | | stage. Karsten Fuelster explains: “The earlier |
| catalyst in raising project funding.” | | | | we engage with companies the more we can |
| IFC finances advanced mining exploration as well | | | | support their project development and assist in |
| as mine construction and operation through a | | | | addressing environmental and social issues.” |
| variety of financial products ranging from equity, | | | | As of June 2006, IFC’s investment portfolio in |
| mezzanine, subordinated to senior debt. IFC also | | | | all industry sectors in East Asia and the Pacific |
| invests in mining services, mine expansion and | | | | stood at US$3253 million, with almost US$1500 |
| provides corporate funding. Increasingly, it is | | | | million in China, US$606 million in Indonesia, US$407 |
| looking to make equity investments in junior | | | | million in the Philippines, US$20 in Thailand, and |
| companies during the early stages of project | | | | US$104 million in Vietnam. |
| development. In these cases, IFC typically | | | | “We are looking selectively at investment |
| supports the completion of feasibility studies and | | | | opportunities throughout Asia and are currently |
| assists in setting-up community development | | | | talking to a number of potential clients. With |
| programs that help to secure a “social licence | | | | IFC’s financial, technical, environmental and |
| to operate” among local people. | | | | social in-house expertise, we offer an attractive |
| As an example of the IFC’s focus on | | | | value proposition to clients,” Karsten Fuelster |
| sustainable mining through early equity | | | | says. |