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- Forward Linkages (Supplying Extractives’ Downstream Sectors)
- Factors to Consider before Moving Downstream
Factors to Consider before Moving Downstream
At a Glance
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When considering whether or not to move downstream, policy makers should be aware that very few countries that produce or export raw materials also successfully export their processed products. This is true of developed as well as developing countries.
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The skills and capabilities needed to produce raw materials are not the same as those required for successful downstream activities. Market access is another important factor.
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Policy makers serious about investing in the downstream processing of domestically produced oil and gas or minerals would do well to consider what makes economic sense in both the short and long term.
Case Studies
- Downstream Activities: The Possibilities and the Realities (Anton Lof, Olle Ostensson)
- Examining Beneficiation (Ricardo Hausmann, Bailey Klinger, Robert Lawrence)
- Rio Terminates Kwinana Hismelt Plant (Peter Klinger)
- Troubled BHP Plant Faces Closure (The Age)
Key Resources
Topic Briefing
Government support for downstream production in countries producing minerals and oil and gas is widespread, and is further supported by key policy frameworks, including the Africa Mining Vision.[1] For example, almost all African countries have policies designed to encourage the beneficiation of their natural resources. And all such countries apply some form of export control measures on the raw materials that they produce. Only five, do not apply any export taxes, although all apply measures that could have similar effects.[2]