- Shared Use of Extractive Infrastructure and Resource Corridors
- Sharing Transport (Roads, Ports, Railways)
Sharing Transport (Roads, Ports, Railways)
At a Glance
Transport infrastructure may be shared among extractive projects or with other sectors beyond extractives.
For railways, roads, and pipelines, a “right of way” the transport infrastructure.
Best practice is for the government to retain ownership of the right of way even when the ownership of infrastructure assets. This ensures that other types of infrastructure can be installed and benefit from economies of scope.
- A Framework to Approach Shared Use of Mining-Related Infrastructure, Case Study: Mozambique (Nicolas Maennling, Alpa Shah, Sophie Thomashausen)
- A Framework to Approach Shared-Use of Mining-Related Infrastructure, Case Study: Liberia (Alpa Shah, Sophie Thomashausen)
- A Framework to Approach Shared-Use of Mining-Related Infrastructure, Case Study: Sierra Leone (Alpa Shah, Sophie Thomashausen)
- A Socio-Ecological Approach to GIS Least-Cost Modelling for Regional Mining Infrastructure Planning: A Case Study from South-East Sulawesi, Indonesia (Saleem H. Ali, Greg Brown, Bernadetta Devi, Alex M. Lechner, Phill McKenna, Shanty Rachmat, Paul Rogers, Ashlee Schleger, Muhammad Syukril)
- Investment Promotion Agreement (Ivanhoe Mines Mongolia Inc. LLC, Ivanhoe Mines Ltd., Rio Tinto International Holdings Limited)
- A Framework to Approach Shared Use of Mining-Related Infrastructure (Nicolas Maennling, Alpa Shah, Sophie Thomashausen, Perrine Toledano)
- Leveraging Extractive Industry Infrastructure Investments for Broad Economic Development: Regulatory, Commercial and Operational Models for Railways and Ports (Perrine Toledano)
- Fostering the Development of Greenfield Mining-Related Transport Infrastructure through Project Financing (International Finance Corporation)
- Cross-Border Oil and Gas Pipelines: Problems and Prospects (World Bank, United Nations Development Programme)
- Breaking out of Enclaves Leveraging Opportunities from Regional Integration in Africa to Promote Resource-Driven Diversification (Gozde Isik, Kennedy Opalo, Perrine Toledano)
This document presents the findings of a study conducted by the Columbia Center on Sustainable Investment on the shared use of ...
This document focuses on cross-border pipeline investments and explores ways that possible conflict and disruptions can be prevented, ...
Fostering the Development of Greenfield Mining-Related Transport Infrastructure through Project Financing
This document focuses on mining-related railway and port infrastructure projects, highlighting the ownership and financing implications of ...
Breaking out of Enclaves Leveraging Opportunities from Regional Integration in Africa to Promote Resource-Driven Diversification
This report explores the relationships between extractive resources, regional integration, and economic diversification. It discusses the ...
This investment agreement between the Ivanhoe Mines Mongolia Inc. LLC, Ivanhoe Mines Ltd., Rio Tinto International Holdings Limited, and the ...
This document presents the findings of a study conducted by the Columbia Center on Sustainable Investment (CCSI) on the shared use of ...
This document presents the findings of a study conducted by the Columbia Center on Sustainable Investment on rhw shared use of ...
A Socio-Ecological Approach to GIS Least-Cost Modelling for Regional Mining Infrastructure Planning: A Case Study from South-East Sulawesi, Indonesia
This report is designed to discuss linear networks for mining infrastructure. A method for conducting Geographical Information System ...
Extractive industries’ demand and investments in transport infrastructure may be leveraged to benefit other users. This includes road, rail, port, and pipeline investments for both mining and oil or gas projects.
Transport infrastructure may be shared among extractive companies or shared with users outside the extractive sector. For example, a railway line may service two or more iron-ore companies, or carry both iron ore and passengers.
For railways, roads, and pipelines, the right of way, or servitude, is an important concept. This is the land area granted as part of the transport infrastructure. Best practice is for the government to retain ownership of the right of way even the ownership of the infrastructure assets. This ensures that other types of infrastructure can be installed in this area and benefit from economies of scope.
The types of transport infrastructure investments required to make an extractive project viable are very context- and commodity-specific. Coal and iron ore may involve railway investments given that these commodities are bulky and have a high weight-to-price ratio, with their transport making up a significant proportion of the total costs. Furthermore, in the past, these commodities have provided investors sufficient margins to consider high up-front capital expenditures. While railway investments are more capital-intensive than road infrastructure investments, operating costs are lower. The economics of railway investments, as compared to road investments, improve the longer the distance between the point of production and point of delivery.
Road infrastructure investments may be required both to provide an extractive project with inputs and to deliver the outputs. In most cases, road infrastructure outside the concession area of an extractive industry will have to allow for multiple users and purposes. This is not the case for railway investments; the large majority of rail projects financed by mining companies are not shared.
Port investments are also very context specific. The greatest potential for greenfield port infrastructure investments by extractive companies come from large-scale coal and iron-ore mines that are distant from existing ports. Similarly, liquefied natural gas (LNG) projects provide an opportunity for greenfield port infrastructure investments. Where mining/LNG projects are located close to an existing port that can handle large vessels (or can be expanded to do so), companies may only need to invest in port superstructure, which is the infrastructure needed for a particular type of cargo, including terminals, storage facilities, stackers, and reclaimers.
Pipeline investments are particularly relevant for the petroleum industry to transport the output from production to distribution points. They are also used by mining companies to transport inputs such as water to the project site and to transport the output via slurry pipelines. Pipelines may be shared by extractive companies, for transport of the same commodity.
While the most efficient transport solution and its relevance for shared use is context specific, there are a few general principles:
- Sharing transport infrastructure can be of regional significance, with benefits to not only one country but also its neighbors. See the Creating Resource Corridors subtopic for more information.
- Transport infrastructure can be shared from the project planning stage to post-project closure. It is of utmost importance to discuss sharing arrangements during the very earliest phases of a project to ensure that various options are studied during the prefeasibility and engineering studies. Retrofitting transport infrastructure post-construction is complex, costly, and may disrupt operations. Infrastructure such as roads and ports may be used during the construction phase, while pipelines and railways will be used only during operations. If the infrastructure is to serve other stakeholders after the closure of the anchor project, a handover plan needs to be put in place.
- Road infrastructure is the most likely to be open access. This is followed by pipeline and port infrastructure. Railways are generally the most difficult to share. This is due to a combination of factors such as the additional costs related to shared use, the likelihood of transport disruptions due to shared use, and the competitive nature of extractive companies (who use infrastructure to gain an advantage over competitors in the region). The two railway case studies in the Key Resources show the inherent complexity and challenges of sharing rail infrastructure.