This has been traditionally outside companies' expertise, perhaps because it needs unrelenting work outside the mines, and relies strongly on other parties. But addressing the issue successfully is likely to involve a shift in approach towards an expanded commitment from management, rather than increasing financial transfers. This will bring with it a new set of dilemmas. How can mining companies:

1. Use their influence to leverage both capital and expertise, and facilitate the co-ordination of different players and programmes?
2. Contribute to the emergence and consolidation of local institutions for economic development?
3. Promote regional development plans rather than strategies solely dependent on mining?
4. In short, how can mining companies become catalysers of economic development?

This is an area in which the industry needs to take the lead, as clever and innovative decisions by single companies can make a lot of a difference - and Rio Tinto should be able to capitalize on this. A new generation of mining projects is already emerging, conceiving the mines as regional development poles, such as the Group's projects in Madagascar, and at Simandou in west Africa or Corumbá in Brazil. In these cases, the viability of the projects may depend on their ability to deliver regional economic development together with strong shareholder value. This is a challenge worth extending to the rest of the industry.

Nicolas Di Boscio works in Rio Tinto's Economics Department based in London. The article is derived from a paper presented to the international mining seminar "Global investment, local challenges", at the University of Dundee, Scotland, June 2004.