TechnoServe, Anglo American, and the Inter-American Development Bank are collaborating in a regional public-private partnership to catalyze locally adapted economic development for communities surrounding Anglo American’s mining operations in Brazil, Chile, and Peru.

Context

Mining companies play a critical role in helping drive economic growth, employment, and exports for a number of the emerging markets in which TechnoServe works. However, while these operations bring investment and jobs, these benefits are often not shared by all members of the community. Employment opportunities may not extend to all households. Local businesses may lack the skills, knowledge, and market access to take advantage of the opportunities provided by economic growth around the mining operation. And the subset of businesses that could potentially become direct suppliers to the mining operation often lack the training and support they need to integrate into formal supply chains.

Opportunity

While mining operations themselves cannot always provide equitable and sustainable growth across communities, they can serve as an economic catalyst for comprehensive local economic development, supporting enterprises and value chains – both within and beyond their own supply chains – to boost employment and incomes. By spurring the development of more prosperous local economies, mining companies also strengthen their license to operate within communities, local and national governments, and more sustainable and inclusive value chains.

Strategy

Building on their successful partnership strengthening communities’ economic development across five countries, Anglo American and TechnoServe are working with the Multilateral Investment Fund (MIF) – a member of the Inter-American Development Bank (IDB) Group – to bolster broad economic growth of mining communities through the Beyond Extraction program. Beyond Extraction uses a market systems approach tailored to each country’s context, supporting local economic development by increasing the capacity of rural businesses, youth, and institutions to build more diversified, competitive, productive, and prosperous economies.

In Chile, the initiative focuses on improving the job prospects and self-employment skills of young women and men, and on strengthening actors in the labor and self-employment market.

In Chile, the EmpleaT program has worked since 2016 to strengthen the local workforce and increase employment opportunities around Anglo American’s operations in the Metropolitan and Valparaíso regions by training women and youth in the skills they need to acquire or create meaningful employment. In order to ensure that this burgeoning generation of entrepreneurs and workers are able to sustainably apply their new skills to a healthy job market, TechnoServe is also building strategic public-private partnerships with corporations and government bodies that can continue to train and provide employment for local women and youth after the project’s end, and to support them to become participants and leaders in their emerging economies. Over three years, EmpleaT will train 1,300 women and youth to improve their livelihoods across eight of Chile’s mining communities.

In Brazil, Beyond Extraction is working to build more robust local economies and reduce dependence on mining activity.

In Brazil, the Crescer program is working to diversify local economies in the area surrounding the Minas-Rio mine in Minas Gerais State. In these communities, lack of economic opportunity beyond the mining sector has driven youth to seek employment in urban areas, further diminishing prospects for rural economic growth. In order to help these communities reduce their dependence on mining activity, the program is strengthening four local industries with growth potential – tourism, beekeeping, dairy, and horticulture. Beyond direct technical assistance for businesses within these industries, TechnoServe is also improving the capacity of local institutions to support these sectors in the future, ensuring the scalability and sustainability of their growth after the projects’ end. An important aspect of the program is youth empowerment, which aims to support enterprising young people to build livelihoods within their rural communities and contribute to its sustained growth.

In Peru, TechnoServe teams are helping businesses to capitalize on the market opportunities opened by increased mining activity, and to integrate into the supply chains of these operations.

The Emerge program focuses on preparing small- and medium-sized enterprises to enter the mining sector’s supply chain, as well as to foster mining activities; potential to growth and benefit other industries – such as commerce, hotels, and restaurants. The project will boost the performance of entrepreneurs in these key sectors by providing group and on-on-one training in business management and financing, and by building partnerships with public and private organizations with the ability to support maintained growth throughout the market system.

Results

Over three years, Beyond Extraction aims to maximize access to markets for labor, goods, and services for over 2,000 entrepreneurs and workers across various local sectors. By partnering to build the capacity of local public and private actors, Beyond Extraction ensures that mining communities will continue to grow and thrive after the project’s end.

The EmpleaT program in Chile has succeeded in training two cohorts of participants, resulting in 319 graduates, 42 percent of whom have increased their incomes through employment. The initiative will work with 1,300 women and youth to improve their livelihoods through employment or entrepreneurship.

In Brazil, Crescer has already surpassed its original goal to provide business and technical advisory services to 250 rural and urban entrepreneurs. To date, the program has supported nearly 300 participants to improve their management practices, which rural enterprises have leveraged to increase sales by an average of 37 percent. Crescer has also trained 248 youth and women in personal and professional development skills, and facilitated $300,000 in long-term financing for participating businesses, helping them to sustain their growth through Brazilian banks and local supply contracts.

The Emerge Peru project will work with more than 400 entrepreneurs and suppliers to local mining clusters.To date, the initiative has helped more than 200 enterprises to increase their sales by more than 50 percent through business development training.