Together with Canada Toronto Stock Exchange (TSX), Australia’s ASX (Australian Securities Exchange) accounts for more than 75% of the globe’s exploration companies. This means two things: TSX and ASX companies explore a lot; and they owe a lot to the millions of foreign lives their exploration activities affect.
Which is not to say that these offshore explorations don’t benefit local governments and communities. But money is only one way to repay a society for the use of their natural resources, especially when the explorers stand to do well in most cases.
So how do you approach this ethically, and ensure that you enrich not only the coffers of the locals, but other important aspects of their lives?
Naturally, the exploration company must pay royalties to the host country. But that’s not the only way they’re financially rewarded. There’s also income taxes, and secondary benefits like company taxes, personal income taxes and other taxes payable by equipment suppliers, service providers, and individuals employed in the operation of the mine. These secondary revenues can considerably outweigh the money collected from the explorer’s income taxes and royalties.
There are other financial rewards too. In Southeast Asia, countries like Malaysia and Thailand are capable of processing the bulk of any mine production themselves, because they have established and competitive industrial bases. This also means they can cash in on revenues like equipment manufacture and maintenance, as well as revenues from mineral processing in downstream industries.
So now that you’ve lined a country’s pockets, how do you reach out further, beyond the mine gates, to make a positive impact on the lives of the communities you engage with? Let’s look at how ASX listed exploration company Pan Asia Metals (ASX:PAM) answers the question…
PAM’s Thailand operations employ a resident team of 7 fulltime local Thai people: 3 geologists, 1 liaison and 3 in administration and accounting. PAM also uses local contractors and often employs a large casual workforce when exploring. And in addition to providing employment, the exploration process builds the national skillset, and increases the national geological knowledge base, all of which holds huge social value in the long-term.
And in another form of wealth that exists above money, PAM commits serious time and effort to respecting local communities’ heritage, safeguarding their health, and co-shaping their children’s education. One such educational initiative is PAM’s ‘The Village Scientist’, which helps build school infrastructure, purchase learning materials, books and other equipment, and train teachers to run the school program.
As ‘The VIllage Scientist’ grows, with the help of like-minded individuals and companies operating in Asia and globally, this grassroots program will empower local communities and reap multiple benefits for the new generation — and the next.
And in the end, this is the most ethical way an exploration company can share the wealth. Because the most valuable and far-reaching repayment isn’t money. It’s prosperity.