Authors: Laura P. Hartman, Jenny Mead and Patricia H. Werhane, Darden Business Publishing
BHP Billiton, the world's largest diversified resource company at the start of the 21st century, began a feasibility study in 1995 for building an aluminum smelter project in the Maputo province in southern Mozambique — one of the world's poorest countries that was hampered by fragile legal, financial, health, safety, environmental, and community institutional structures and capacity. BHP Billiton was committed to sustainable development and believed that social and environmental performance were critical factors in business success.
BHP Billiton believed firmly that sustainable development involved engaging and partnering with its community stakeholders to address the challenges associated with establishing resource projects and to share the benefits of success. Was this possible in Mozambique, given the nation's social and political challenges, the prevalence of malaria and HIV, and the weak infrastructure? Acknowledging that stakeholders had a role to play in achieving a successful and sustainable project, BHP Billiton adopted this slogan for the project: "Together we make a difference." The company called the project "Mozal." But would or could they be successful? And at what cost?
BHP Billiton began construction of Phase 1 of the Mozal aluminum smelter in 1998. Because of the challenges that the community presented, BHP Billiton and its partners created the Mozal Community Development Trust (MCDT), which worked to improve the infrastructure, social services and health care of the community. During the two construction phases, the project contributed more than $160 million to the local economy, principally through the employment of Mozambican laborers and the use of local contractors and suppliers. The MCDT implemented malaria prevention and HIV/AIDS prevention program, made improvements to the health clinics and schools, instituted work force training and development, and supported small and medium enterprises.
In addition, it initiated projects aimed at raising the level of education of the country's engineers and technologists to international standards. In 2002, when both phases of the Mozal smelter were complete, the World Bank's International Finance Committee (IFC) stated that Mozal had set a precedent for future projects in Mozambique. Mozal, said the IFC, "illustrates the clear advantages of incorporating environmental and social issues early in a project, and reflects the approach and procedures IFC has been refining and putting in place to deal with environmental and social issues." For BHP Billiton, the Mozal experience demonstrated that, when establishing a major resource project, it made good business sense to invest not only in the venture but also in the host community.