Nauru is rarely top of
mind for most people. If it is thought of at all it is most likely as being the
most obese nation on Earth, or perhaps in a slightly more positive light as
being the world's smallest republic (though not country, that distinction rests
with Vatican City). This blog however aims to take a different tack and glean
lessons that are broadly applicable from phosphate mining in Nauru. Phosphate
is a critical component in the global food supply. It’s primary use is in
fertilizer, but is also important in animal feed supplements. Though it plays a
pivotal role in our food supply, the process of mining phosphate can be devastating
to the land, leaving it completely unusable.
Many countries are
resource dependant and the ills of this are well-known. What Nauru provides is
perhaps the most lucid example of the benefits and ramifications of resource
dependency. Nauru puts into stark relief the huge benefits mining can bring,
from when the tiny island nation became fabulously wealthy, as well as the
ramifications from environmental catastrophe. To fully understand why this is
so, let's look into Nauru's tumultuous relationship with Phosphate.
The benefits of
phosphate mining came quickly, and Nauru was in fact the wealthiest nation on
Earth for a time. Though these benefits did disproportionately benefit colonial
powers, even after gaining independence, significant wealth was derived for
Nauruans from Phosphate. In the peak year of 1975, this amounted to AUD$2.5
Billion in today’s dollars, more than enough for generations of the 10,000 odd
inhabitants to survive on. Tragically however, much of this was squandered,
perhaps most notoriously in a musical that premiered in London on Leonardo da
Vinci having a love affair with the Mona Lisa. This musical was helpfully
produced by one of the financial advisors to the Nauruan government, who wanted
to get into theatre. What was left when the money was gone was a destitute
nation. 80% of its landmass was reduced to little more than hulking bleach-white
towers. The land was not only wholly infertile, but the detritus prevents the possibility
of any kind of building. Promises by companies for reclamation never
materialized. In the aftermath, Nauru's economy has turned to the rather sordid
business of money laundering and detention camps. The former booming in the 90s
as a favourite of the Russian Mafia, while the latter has burgeoned since the
2000s, with Australia currently providing at least 2/3 of Nauru’s revenue for
holding would be asylum seekers in the notorious camps on the island.
This is meant to be
far more than a fascinating history lesson of Nauru. What Nauru provides is
something that is far too often missing from discussions around mining, a stark
example of both the benefits and pitfalls. Resource extraction deserves a
robust policy response that takes advantage in the immediate-term of a
resource, but that purposively plans for the future. Governments often pay lip
service to this idea, but the issue tends to lead to entrenchment on the
extremes. With environmentalists advocating for no resource utilization and
mining advocates wanting to dig without abandon. Pro-mining nearly always wins
out, but far too many countries lack a comprehensive timeline for economic
diversification. Policy needs to ensure mining windfalls are appropriately
invested and that citizens receive tangible benefits. Additionally, prudent
environmental stewardship of mining, including enforceable assurances of clean-up
and reclamation of mines is paramount. Nauru provides a microcosm which
demonstrates the course countries around the globe are destined for with
continued complacency during the good times of a resource boom. A pertinent
illustration of the need for resource-dependant economies to be awoken from
their torpid stupor, and proactively manage their resources. Its lessons should
be heeded.
