Harnessing the bonanza: economic liberalization and capacity building in the mineral sector

Over the past decade many developing and transition economies have liberalized their investment regimes for mining and privatized formerly state-owned mineral assets. In response, these economies have witnessed increased foreign investment in exploration and development, growth in the number and diversity of mineral projects, and the opening up of new channels for harnessing increased economic and social benefits from development in the minerals sector. The restructuring of fiscal and regulatory regimes to encourage foreign investment, and the associated influx of mining capital, technology and skills, is transforming traditional relationships between mining firms, local communities and the government. This transformation necessitates a re-evaluation of the most effective policy approaches to capture increased economic and social benefits from mineral production. This article considers effective mechanisms for improving the capacity of developing and transition countries to maximize the economic and social benefits of mineral production. Common challenges associated with minerals economies are reviewed. Consideration is given to the opportunities for harnessing foreign direct investment and the possibilities for creating new partnerships between local communities, industry, government, and multilateral development agencies through social investment projects. The article concludes with a series of recommendations for the design and implementation of policy approaches towards harnessing mineral production for economic and social benefit following the liberalization of investment regimes for mining.     

The mining industry in the European Union: Analysis of inter-industry linkages using input–output analysis

Input–output modelling is a useful tool in policy analysis and economic planning. This methodology is used to detect the inter-industry linkages known as forward and backward linkages. Examination of these measures provides one mechanism for identifying “key” or “leading” sectors. The main objective of this paper is to measure the linkages of the mining and quarrying industry in the European Union (EU) and to determine if any of the industry subsectors can be considered key sectors. The paper shows that three subsectors can be considered key sectors: the mining of coal and lignite and extraction of peat in Germany; mining of metal ores in Sweden; and other mining and quarrying in Austria, Denmark and Spain. These sectors are more stimulated by overall industry growth than other sectors and have greater impacts in terms of investment expenditures on the national economy than other sectors. The values of the forward and backward linkages show that the mining and quarrying is an industry that would be stimulated by an increase in a regional economy's production more than other sectors, while an increase in the mining and quarrying industry's output would not stimulate this regional economy more than an increase in other sectors.     

Informal coal mining in Eastern India: Evidence from the Raniganj Coalbelt

Unauthorized mines are not uncommon in mineral-rich regions of poorer countries, and India is no exception. Whether they constitute merely a law and order problem including safety issues, or there are important social and economic questions involved has yet to be thrashed out. The mining industry, at regional, national and international levels, is ambivalent towards such mining, tending to draw attention away from their informal nature to the size factor.
This article looks into the problem of such informal mining in the light of empirical surveys in eastern Indian collieries. These are called peoples' mines and they serve a significant purpose in local economies. The article's thesis is that peasant communities are trying to claim back a portion of the local resources lost to them through appropriation by mining companies thus re-asserting their traditional rights to local mineral resources. In conclusion, the need for a new moral economy for mining regions is stressed: an economy in which local communities will play a powerful role.     

Small-scale mining and its socio-economic impact in developing countries

This article examines both the positive and negative socio-economic impacts of small-scale mining in developing countries, and outlines some key measures for improving sustainability in the sector. It is important to clarify that, in spite of experiencing its share of environmental- and health-related problems that adversely impact human quality-of-life, small-scale mining plays a pivotal role in alleviating poverty in the developing world, and contributes significantly to national revenues and foreign exchange earnings. Though these important socio-economic contributions make small-scale mining an indispensable economic activity, there is an obvious need for improved sustainability in the industry, more specifically, for operations to resolve pressing problems, many of which have wide-ranging impacts. However, because most small-scale mines are low-tech and employ poorly trained uneducated people, it is difficult for the sector to improve on its own. Thus, governments and regional international bodies must play an expanded role in bridging critical information, techno-logic and economic gaps. It is concluded that governments and regional organizations could accomplish much in the way of improved sustainability in the small-scale mining industry by: (1) legalizing small-scale mining and implementing sector-specific legislation; (2) contributing to community development and providing increased economic support; and (3) providing training and educational assistance, and playing an expanded role in the dissemination and transfer of important technologies.     

A conceptual approach to model sand–gravel extraction from rivers based on a game theory perspective

Sand–gravel mining is a significant parameter of economic development and social welfare function in modern societies. As demand for aggregate increases in construction industry, conflicts for the availability of the resource and environmental impacts become more intense. The present paper describes the contested status quo in riverbed sand–gravel mining activities with an example from Greece, as a case study. The scope is to propose a methodology about good governance of the mining sector that promotes a sustainable sharing of aggregate resource by securing environment and safekeeping revenues in the mining trade market.     

Small–scale mining in South Africa: Past, present and future

Mining is an important part of the South African economy and has been the driver of much of the economic development of the country. However, the small–scale mining subsector still has to realise its full potential. A small–scale mine has been defined as a mining activity employing less than 50 people and with an annual turnover of less than 7.5 million Rand and includes artisanal mines. Small–scale miners are involved in many commodities but there appears to be a bias towards gold, diamonds and quarrying for construction materials, including brickclays. Small–scale mining is regulated by the same legislation (i.e., for the environment, labour, mineral rights, exploration and mining permitting, and skills development) as large–scale mining, though compliance is low, particularly where artisanal mining in concerned. The effective participation of small–scale miners in the mining sector is hampered by their lack of skills, i.e., technical, business and management, and their limited access to mineral deposits, capital and markets. Some of these hindrances have been inherited from the imbalances of the colonial and apartheid eras and continue to act as barriers, making entrance to the industry difficult. For those who have entered the industry out of desperation, as is the case with most artisanal miners, their activities result in negative impacts evident in the inefficient, unsafe and environmentally unfriendly operations. With the advent of the new political dispensation in South Africa, a new era is dawning for the country’s small–scale mining subsector. This has resulted in a change of attitude and new government policies which have led to special programmes being put in place to promote the subsector. Intervention strategies for the support of small–scale mining (some of which are already in operation) include programmes for kickstarting mineral beneficiation and value–addition projects, development of appropriate technologies and skills and technology transfer. Proponents of small–scale mining see a well–regulated industry as being the cornerstone of future rural economic development, particularly for previously disadvantaged communities in the poverty nodes.     

Challenges to measuring,monitoring, and addressing the cumulative impacts of artisanal and small-scale gold mining in Ecuador

Portovelo-Zaruma, Ecuador is an artisanal and small-scale gold mining (ASGM) region with approximately 6000 gold miners working with mercury and cyanide. Although artisanal gold mining (AGM) has taken place in Portovelo-Zaruma for centuries, highly mechanized small-scale gold mining (SGM) processing plants capable of increased throughput began being built in the 1990s. While there are benefits associated with ASGM, there are also negative impacts experienced by the miners and the surrounding communities. To take advantage of ASGM as a poverty-alleviating mechanism while reducing unwanted externalities, the cumulative impacts must be understood. Numerous challenges to measuring, monitoring, and addressing ASGM impacts result from the complexity of the impacts themselves, the nature of the gold mining as an informal industry, and the shortfalls in the current regulatory framework. These are discussed in the context of ongoing, unresolved issues including efforts to address trans-boundary water pollution, management of mining waste, and conflicts regarding priorities, ambiguities, and enforcement of existing regulations and policies. Internationally, interventions to address both AGM and SGM impacts have typically focused almost exclusively on technological changes through the elimination of mercury use. Our analysis suggests that to better address ASGM and their cumulative impacts in Ecuador, it will be beneficial to revisit the legal definitions of AGM and SGM. Additionally, promotion of information-based strategies including educational outreach programs and cross-scale and cross-level mitigation methods may also be beneficial. The success of these strategies to reduce ASGM-related cumulative impacts will depend on sufficient funding and the commitment of stakeholders.     

Risks and opportunities for foreign investment in the mineral sectors of the Central Asian Republics: Kazakstan,Kyrgyzstan, Tajikistan and Uzbekistan

With the dissolution of the former Soviet Union in 1991, the nations of Central Asia gained independence and began the transition to market driven economies. Both the political and economic transformations of the Central Asian Republics (CARs) (Kazakstan, Kyrgyzstan, Tajikistan and Uzbekistan) have been difficult primarily because of a holdover of various centrally planned `command and control' approaches to national development. The extensive mapping and exploration of the CARs during the Soviet era (approximately 1921–1991) led to the discovery of several hundreds of mineral deposits that were subsequently evaluated, and it is this `pool' of known, but undeveloped, deposits which is of major interest to foreign and domestic companies. However, foreign investment in the mineral sectors of the CARs is at best quite modest and there are very few positive signs that foreign investment will increase dramatically in the near term. The major risks that the mining industry faces as it works in the CARs arise primarily from the fact that the nations are transitional economies which lack both a comprehensive legal framework and experience in dealing with foreign mining corporations and their practices. The major risks are political, economic, financial, infrastructure, contractual, environmental, social and cultural and workforce related. If all individual risk factors are weighted equally, the relative ranking of the countries (from least risk to most risk for mineral development) would be Kyrgyzstan, Kazakstan, Uzbekistan and Tajikistan respectively. However, such a classification scheme does not effectively weight the importance of mineral potential. If the risk criteria are weighted with respect to geologic potential, the ranking of the countries would be (from least risk to most risk) Kazakstan, Uzbekistan, Kyrgyzstan and Tajikistan, respectively.     

Examining the spatial incongruity between mining sector and beekeeping activities

The seminal work of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services on pollinators, pollination, and food production, informed scientific studies on the understudied impacts of mining on agriculture sub-sectors. This paper assesses the potential impacts of mining activities on beekeeping as an agricultural sub-sector, and the flow-on effects on associated economic values and enterprises to enhance sustainable development. A case study is conducted in the emerging northwest gold mining region of Ghana. The Location Quotient (LQ) and Location Association (La) models are used to explore the economic significance of beekeeping, its spatial links with tree habitats, and mining activities. Geographic Information Systems (GIS) were used to analyze the spatial interactions between concessions, trees, and beekeeping. The paper finds that districts with LQ < 1 in beekeeping also record LQ > 1 in mining, and La < 50 between beekeeping and mining. The findings are useful for stakeholder decision-making toward harnessing and leveraging the prospects of mining on integrated rural and sustainable development.     

Multiproduct mine output and the case of mining waste utilization

This article addresses the concepts of economies of scope and multiproduct production, subadditivity and transray convexity as it applies to the mining industry. The article goes on to expand these concepts to include the case of mining waste utilization. It discusses how the modification of mining wastes into a marketable product can develop a relationship across the cost functions of the modified mining waste and ore production and how this interrelationship affects the profit maximizing condition. It discusses four possible outcomes from mining waste modification and its development into marketable products on the profitability and production of ore by the firm. Finally, it discusses mining waste utilization effects on rehabilitation costs and the potential for a decrease in the adverse community effects due to mine closure.     

Designing tools to track health and well-being in mining regions of India

The objective of this article is to illustrate the use of a framework to design a set of tools to assess progress towards improved well-being in a mining region. The framework uses an ecosystem approach to assess human well-being and is sensitive to the needs, concerns, and interests of at least the major stakeholders: government, company and community. The framework seeks to be useful to stakeholders and to be of policy relevance. The article presents the proposed framework with illustrations from a case study in Goa, India. Mining in Goa has had both positive and negative impacts on the well-being of local people. These impacts vary depending on the age of mining. In areas where mining is well established and active, the economic impacts are more positive. The social and environmental impacts are more negative in the regions where mining is new or is closing down. These characteristics generate their own set of issues of concern to stakeholders. Based on these issues, three types of tools to assess current well-being and progress towards improved well-being are suggested: (i) Indicators based on identified issues using the Pressure-State-Response (PSR) framework; (ii) A quality of life instrument, which can be developed either as an aggregate measure of well-being or in a more limited way to capture the satisfaction of the community with their living conditions; (iii) A regional income accounting framework to assess whether the mining region is able to continue functioning into the indefinite future without being forced into a decline through the degradation of its key natural, social, and human assets and resources. The article suggests that if these tools are used regularly, an information system will emerge that will, over time, provide markers of what mining is doing to the region and to the local communities.     

The challenges of sustainability in mining regions: The coal mining region of Santa Catarina, Brazil

Throughout history, mining communities have invariably found themselves striving for a good quality of life and a long‐term future. In the 21st century, problems of maintaining the economic vitality of mining regions are now compounded by concerns about the biophysical integrity of the local environment. In regions of the world where the economic viability of the resource is marginal and achieving a reasonable quality of life is a daily struggle, sustainable mining may seem to be a dubious prospect at best. Yet the twin imperatives of global political forces and burgeoning environmental concerns are requiring industry, governments and other interests to re‐conceptualize the way in which mining takes place in communities. Although mining itself may not be seen as an industry that contributes to the achievement of environmental objectives, it could — with careful planning — be used as a tool to foster a more sustainable and healthier community. This argument is considered in the context of the coal mining region of Santa Catarina, Brazil.     

The metal mining industry in Eastern Europe

The mining industry has been one of the backbones of the socialist countries of Eastern Europe, not only in economic, but also in political, terms. Three years after the beginning of economic reforms, the mining industry in all the Eastern European countries is facing dramatic changes. Most mines are mining ores below acceptable cut-off grades, and there is no hope of finding new, richer deposits. Downstream metallurgical industries will need to replace their former suppliers. In addition, the social contract that had been maintained under the socialist governments is about to be undone and a new form of internal organization must be found. The success of the economic reforms in Eastern Europe depends upon the capacity to develop new industrial relations: the large mining combinates will have to be transformed into competitive capitalist enterprises and the role of the state must be redefined. Prospects for this transformation vary greatly, from metal to metal and from country to country. Finally, restructuring in Eastern Europe will also affect European and world markets, both on the supply and demand sides. The integration of the Eastern European mining industries into the international mining community should be the medium-term goal of all the participants .     

The Scottish economy: the development of underdevelopment?

This paper describes the recent economic history of the Scottish economy and uses a synthesised theory of labour market segmentation and the dual economy to identify the origins of the relative decline of Scottish industry and labour over the period, critically evaluating the role of the SDA and of government policy in general. Incorporating the impacts of takeover and merger of indigenous companies, the promotion of the branch plant economy, the selective effects of emigration and training schemes, and the reliance on small and medium sized companies to regenerate the economies of city‐regions, an analysis based on the importance of the centre‐periphery relations of monopoly capitalism for the Scottish economy is undertaken.     

Study on assessment of slope stability and mixed disposal of overburden in voids of Singrauli Coalfield

The mining industry can be considered the backbone of the Indian economy as well as facilitating the power that drives most of the other industries in the company. The overburden and waste rocks produced during coal mining are major concerns in regard to the amount of land that is required for their disposal, as well as the stability of dumps for these materials, which are of increasing height. Land reclamation issues are also a concern. In this work the adverse impacts caused by the dumping of overburden on land and acidic mine water on water bodies is discussed. Remote sensing tools were used along with the laboratory experimentation to assess the various impacts. This study also shows that silt released from waste dumps, can affected the angle of repose of the overburden dump slope. The angle of repose of the overburden materials varies with particle size composition. Thus, use of in‐pit crushers in large opencast mining operations can effectively reduce the area locked under the waste dumps. The acid neutralization potential of fly ash and overburden for the treatment of acid water was tested in the laboratory by using fly ash and waste rock materials on acidic coalfield water. The results are encouraging, and fly ash may prove to be a good acid neutralizer when used in conjunction of coal overburden material.     

New mercantilism: A perspective on how politics is shaping world metal supply

The major countries consuming metals tended historically to be also the major countries producing them. It was in their interest to promote mine development to provide low cost raw materials. Over the past fifty years, the share of global production accounted for by consuming countries has declined and producers and consumers of metals have been slowly moving into separate camps having distinct and differing interests. As a consequence of this, governments of producing countries have become more focused on how to maximise the benefit of metal extraction to their economies rather than on how to supply cheap raw materials; a tendency which has found expression in resource nationalism. Governments of consuming countries have in response become increasingly concerned about the implications of this tendency to their economic development and some countries, most notably China, have adopted robust policies to secure their supplies. Through their actions to influence capital flows within the mining industry and to force metals trade into channels which better serve their national interests (a process characterised here as ‘new mercantilism’), metal producing and metal consuming countries are reshaping global supply.     

Tracking changes in the global impacts of metal concentrate acquisition for the metals industry in Finland

This article considers the environmental impacts and the governance framework of the domestic and international supply of iron, zinc, copper and nickel concentrates smelted and refined in Finland. The metals industry in the country is heavily dependent on imported concentrates, and the research is thus focused on defining the level of impacts related to mining and mineral processing abroad, and the change in the impacts between 2000 and 2010. The estimations of environmental impacts are based on waste minerals and CO_2eq emissions, and the quality of governance in the set of indicators measuring different aspects of governance. The total amount of waste minerals and CO_2eq emissions related to metal concentrates decreased over the ten-year period. At the same time, the quality of governance improved in all concentrate groups except nickel. Ore grade, mine type and transportation distance appear to be the most influential factors on environmental impacts. The results suggest that the country of origin can have a noticeable effect on the environmental impacts and the quality of governance of the mining and processing of metal concentrates.     

Mining investment and regional development: A scenario-based assessment for Northern Sweden

The way in which mineral development contributes to economic development in the region where it takes place is important for the mining industry’s relations to the local community. The purpose of this paper is to provide an assessment of the regional-economic impacts of a large-scale contemporary iron ore project in Northern Sweden (including two new mines, two processing plants, and one pellet plant). The regional input-output model rAps, provided by the Swedish government agency NUTEK is used, and it explicitly addresses the linkages between demographic development, the labour market, industrial production and the municipal finances in a consistent modelling framework. The simulation results suggest an average employment multiplier of about 2-2.5 during the maximum production phase, indicating that for every 100 jobs in mining about 100-150 jobs are supported elsewhere in the local economy. The positive impacts in this case are made possible in large because of the existing mining cluster and local suppliers in northern Sweden. Still, these results are perhaps best viewed as an indication of the potential for local economic development as they neglect, for instance, potential supply constraints (e.g., attracting the necessary labour force, road infrastructure, etc.). Specific policies to further strengthen the regional linkage effects may therefore be necessary in order for this potential to be realized in practice, and attention would preferably be paid to policy measures that have positive external spillover effects on the surrounding geographical area.     

Economic responses to the closure of small-scale coal mines in Chongqing,China

In 1998, China launched a programme to close tens of thousands of small-scale coal mines within just three years. Few measures were put in place to mitigate the negative impacts. This paper reports on a study in the Chongqing Municipality of south-west China, with the aims of identifying the economic impacts of the mine closure campaign and examining what factors permitted some localities to respond more successfully to the resulting economic challenges. Those areas with greater wealth and more diversified economies were able to absorb the shock of mine closure more effectively than poorer areas and those with less diversified economies. These latter groups either failed to respond to mine closure or reacted by increasing output from the remaining mines. In the successful cases, though the economy of the area as a whole was able to withstand the impact of the mine closure campaign, no evidence was found of any attempts to assist those in the local communities directly affected by mine closure.     

Gemstone mining as a development cluster: A study of Brazil’s emerald mines

For many centuries, emeralds have bejeweled the rich and famous all over the world. Emeralds have also made many millionaires overnight, sometimes by chance, as in some of the cases reported in this study. On the other hand, even though emerald mining has brought some economic benefits, many of these have remained at the top of the production chain. In many cases mining activities have caused a number of negative social and environmental impacts locally. Working conditions in small mines are very poor in general: with bad ventilation, high temperatures, long working hours, lack of safety, informal working contracts and no health or life insurance. Environmental impacts can be significant, such as widespread deforestation, erosion of abandoned mines, and soil and water pollution in streams. The economic and social public benefits can be minimal. Even when taxes on gem mining are relatively low, much of the mining local activity is informal and the high value-added formal activities take place outside the mining regions. This study aims to understand the dynamics of emerald mining and its impact on local development using the concept of clusters. The research analyzes three case studies in Brazil: Campos Verdes/Santa Terezinha (Goias state), Nova Era/Itabira (Minas Gerais state) and Carnaiba/Campo Formoso (Bahia state). Emerald mining regions attract many migrants, increasing the demand for public services (infrastructure, health, education, etc.), but local governments are unable to provide for them because the activity produces little tax revenue. In the end, there is a growing mismatch between demand and supply of public services, leading to a series of social and environmental problems. However, working with the concept of cluster can help to shed light on policies to improve the local benefits of gem mining, by organizing the miners and their supporting organizations to allow investments that bring long term benefits locally.