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Shared Use of Extractives Infrastructure and Resource Corridors

  • Infrastructure requirements may be readily accessible in advanced economy contexts, but in remote regions of developed countries like Canada or Australia, as well as in many resource-rich developing countries, natural resource companies typically finance and develop a range of infrastructure components.
  • Company-developed infrastructure is often made available solely for the use of a specific project, lacking any significant connection to the wider economy.  
  • By implementing a “shared use” or “open access” approach, companies and governments can leverage investment in extractive industry-related infrastructure for the benefit of host countries, as well as national and regional communities.
  • Shared use can follow a “multi-user” approach, where users from the same industry share the infrastructure, or a “multi-purpose” approach, where the infrastructure is designed to serve multiple purposes or industries.
  • A government will improve its chances to negotiate and implement a shared use policy if the company receives all policy information before making capital budgeting decisions regarding infrastructure and submitting its feasibility study to financiers.
  • Shared use of infrastructure can support community access to services, economic diversification, regional development, and linkages, and may also contribute to sustainability by reducing the environmental footprint of infrastructure development.

Key Resources

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A Policy Framework to Approach the Use of Associated Petroleum Gas

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Leveraging Mining Investments in Water Infrastructure for Broad Economic Development: Models, Opportunities and Challenges

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Leveraging the Mining Industry's Energy Demand to Improve Host Countries' Power Infrastructure

This resource provides a global survey of shared-use models in the context of power. Good practice principles for power infrastructure ...

Topic Briefing

The success of mining and oil and gas projects depends on reliable access to various types of infrastructure. Ports and railways to get products to market; power to run the projects; water to be used in processing; and internet and telecommunications to control operations, among other usages.

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These infrastructure requirements may be readily accessible in more developed countries. However, even in the remote regions of developed countries like Canada or Australia and in many resource-rich developing countries, natural resource companies typically finance and develop various infrastructure components. Company-developed infrastructure has often been available solely for the use of a specific project, with no connection to the rest of the economy.  

How can we leverage these investments for the benefit of host countries? By implementing what we call “shared use” of the mining and oil and gas related infrastructure. The concept of “shared use” or “open access” relates to finding ways to leverage extractive-industry-related infrastructure investments in developing countries for the broader benefit of the national and regional community.

Shared use can take two forms:

  1. It may follow a “multi-user” approach, where users from the same industry share the infrastructure (such as coal miners sharing a railway in the same region or gas producers sharing the same pipeline).
  2. Alternatively, it may follow a “multi-purpose” approach, where the infrastructure is designed to serve multiple purposes or industries—such as mining and agriculture.

Recent experience shows that shared use can foster parallel development of both the extractive industry project and the country by enabling both to take advantage of economies of scale and economies of scope.

In particular, economies of scope are key to turning a logistic resource corridor into a spatial development corridor, in which the extractive industry sector’s infrastructure needs help to enable the development of infrastructure that other economic sectors need but generally cannot afford. For example, a companies’ infrastructure demand and financial capacity can be leveraged to develop trunk infrastructure that is made open access to other users who can build feeder roads to more remote areas where other activities such as agriculture, tourism, and forestry can then thrive.

Different commodities also present different opportunities. Gold projects, for example, are water intensive and require a substantial water infrastructure solution. However, gold projects typically do not require railway transport infrastructure. Therefore, a blanket policy that doesn’t take into account specific project economics is likely to fail. Additionally, a government will improve its chances to negotiate and implement a shared use policy if the company receives all policy information before making capital budgeting decision regarding infrastructure and submitting its feasibility study to financiers.

If shared use is implemented correctly, the developmental impacts can be tremendous. Shared use of infrastructure can support community access to services, economic diversification, regional development, and linkages. Shared use may also contribute to sustainability as it reduces the environmental footprint of infrastructure development. The multi-user approach can also facilitate the development of smaller deposits that could not afford the infrastructure development, thus avoiding stranded deposits. Lastly shared infrastructure can contribute to fairer bids in cases where incumbent extractive industry companies would otherwise have a monopoly on infrastructure. This is an important consideration given that infrastructure deployment can make up the majority of the capital expenditure.

Of course, the case for shared-use infrastructure is nuanced. Sharing-related costs and benefits can vary substantially from project-to-project and country-to-country, and any analysis must take the specific costs and benefits into account. In addition, certain types of shared-use infrastructure tend to yield greater benefits than others. Water and power can be good opportunities, for example, as the benefits for both parties are high and the coordination costs are low. A shared railway, on the other hand, may increase demand at the port, be harder to coordinate, and cause bottlenecks.