System dynamics modelling: A more effective tool for assessing the impact of sustainable development policies on the mining industry

The high mobility of mining investment is frequently cited in the literature. Consequently, the concept of relative attractiveness is particularly important. This paper describes a detailed computer simulation 'feedback' model. The model provides a means of examining the effects of varied environmental, fiscal and corporate policies on the flow of investment funds and mineral resources between a number of simulated mining firms and competing countries. Through a quantitative analysis of existing data, the model exposes, within the context of sustainable development, the underlying assumptions used as a basis for corporate decisions. Through the compression of time, the model provides a means of taking these assumptions to their logical conclusions. Exposing assumptions in this way leaves less room for misinterpretation and provides a solid basis for enhancing the understanding of system structure. It is by better understanding system structure that more effective sustainable development policies may be designed and implemented. An outline of the system dynamics method is also presented.