The evolution of the Canadian mining industry: The role of regulatory punctuation

In this study, we analyze the evolution of Canada's mining industry from 1929 to 2006, focussing on the determinants of the number of firms in the industry and why this number changed over that period. Most empirical studies of industry evolution have focused on manufacturing industries that share similar structural characteristics. Perhaps because of this, extant models of industry evolution tend to ignore industry-specific and national-specific factors that can cause atypical trajectories, that is, heterogeneous industry evolution. Initial inspection of the Canadian mining industry shows that it is atypical in that it exhibits “negative skew” over time in the number of firms rather than the typical “positive skew.” We review two dominant theoretical approaches to industry evolution: the density-dependence theory and variants of industrial organization economics. We also consider possible sources of industry evolution heterogeneity, focussing particularly on “regulatory punctuation”. Using Canadian mining data, we find that the traditional models do not fully explain the changes in population size in Canada's mining industry. As a result, we introduce a number of hybrid models. The results from these hybrid models suggest that Canadian-specific regulatory punctuations, particularly the introduction of significant new taxes, environmental legislation, and incentives have shaped the trajectory of mining firm participation.     

Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina

Since the liberalisation of its investment regime in the 1990s, Argentina has seen a rise in foreign direct investment into large-scale exploration and exploitation of mineral resources. However, many social groups (local communities, grassroots movement and the church) often strongly oppose new mining projects on the grounds of environmental, ethical and economic concerns. In a situation marked by widespread conflict, mining companies continue operating and develop Corporate Social Responsibility (CSR) initiatives which are often promoted as a means of contributing to the sustainability and development of the nation. The paper develops a framework to highlight how the principles of stakeholder theory could be used as conceptual and practical guidance for conflict-resolution oriented CSR policies. The framework is further used to analyse two case studies of conflictive mining projects in Argentina. The paper explores how key stakeholders perceive contribution of CSR to welfare and the socio-economic development of mining communities and sustainable development of the nation. It demonstrates that institutional and social stakeholder networks often strongly oppose the idea of voluntary self-regulation implied by CSR in situations characterised by weak governance. Even though the CSR of companies could be improved in areas of corporate communication, transparency, stakeholder engagement and dialogue, it is not seen as a panacea for the social conflicts in the sector.     

Measurement of market power for the environmentally regulated Korean iron and steel manufacturing industry

For industries in which where market prices of certain inputs are not available, measuring the degree of market power by using the markup over the marginal market cost may be inappropriate. With regard to the Korean iron and steel manufacturing industry, which is subject to environmental regulations, the calculation of the price of abatement capital is hindered by a lack of relevant data. To increase the reliability of market power markups, this paper estimates the restricted cost function in which abatement capital is assumed to be quasi-fixed at an optimal level and the supply relation. The degree of market power for the industry, measured as the ratio of the estimated market power markup to the supply price, was estimated to be 0.54 on average between 1982 and 2001. The results indicate that ignoring environmental regulations can overstate the degree of market power by approximately 12%.     

Perspectives on community health issues and the mining boom-bust cycle

The health of mining communities is becoming a priority for the mining industry, governments, and researchers. This paper describes an exploratory qualitative study into community health issues and mining activities (associated with the mining boom-bust cycle) from the perspective of health and social service providers in the northern Canadian coal mining community of Tumbler Ridge, British Columbia. Health and social service providers report on increases in pregnancies, sexually transmitted infections, and mine related injuries during booming mine activities. During bust times, mental health issues such as depression and anxiety were reported. Overarching community health issues prominent during both boom and bust periods include burdens to health and social services, family stress, violence towards women, and addiction issues. This paper concludes by providing recommendations as to how the industry can enhance community health made by this important stakeholder group.     

Challenges with eradicating illegal mining in Ghana: A perspective from the grassroots

This paper argues that artisanal mining communities are somewhat bound to their operations, and helps explain why formalisation, alternative livelihood projects and military intervention—the traditional strategies employed by governments to tackle illegal mining—have proved ineffective. Findings from recent research carried out in Noyem (Eastern Region of Ghana) are used to illustrate why illegal artisanal mining is such a deeply rooted activity in sub-Saharan Africa. The analysis provides four explanations in support of this: a heavy involvement of traditional leaders in operations; the mindsets of many operators toward alternative income-earning activities; the numerous and diverse range of employment opportunities provided by the sector; and the level of investment in operations.     

Uncertainty in exhaustible natural resource economics: The irreversible sunk costs of Hotelling

According to Pindyck (2007) there are three important aspects of uncertainly in environmental economics: (1) the benefits and costs of environmental policy tend to be highly non-linear, (2) environmental policy tends to involve important irreversibilities, where investment in pollution abatement can impose an irreversible, sunk cost on society, and where certain pollutants can stay in the environment forever and build up to cause even more future harm in which case investment in abatement can cause an irreversible, sunk benefit to society, and (3) environmental policy involves long time horizons and yet the discount rate society should use is uncertain for determining the net present value of costs and benefits of pollution abatement. These same uncertainties also affect non-renewable, exhaustible, natural resource economics and in particular the use of the Hotelling rule: (1) the costs, benefits and transversality conditions of using the Hotelling rule can be highly non-linear, (2) the Hotelling rule involves important sunk cost irreversibilities, which will be explained here, and (3) the Hotelling rule can involve long time horizons with uncertain discount rates. All three of these problem make it extremely difficult for a market to use in any way the Hotelling rule, yet by the sheer number of articles in non-renewable natural resource economics, one would believe that it is the basis of all resource markets. In this article, we concentrate on the sunk cost irreversibilities of using the Hotelling rule. The idea of the Hotelling rule is to optimally store a non-renewable resource, but the optimization is highly dependent on the actual reserves that are available to extract. However, reserves of underground exhaustible resources are often unobservable at the beginning stages of extraction which makes using the Hotelling Rule difficult.     

The sustainability of China's major mining cities

The aim of this paper is to identify principal factors controlling the Degree of Sustainable Development of Mineral Resources (DSDMR) of mining cities and then to measure their DSDMR and reveal their developing trends. To do this, 78 Chinese mining cities are used as an example. These cities are classified on a hierarchical level of the DSDMR in order to support decision-making of sustainable development. Six principal factors controlling the DSDMR are recognized using factor analysis. They are used to measure the DSDMR of the Chinese mining cities and their developing trends. The results show that in terms of the type of mineral resources, the DSDMR decreases from petroleum to multi-resources to non-metal to coal to metal cities. It decreases also from middle to old to young aged cities and from eastern to central to western cities in geographical location. In addition, large and very large cities have higher DSDMR values than middle- and small-sized cities. These Chinese mining cities are classified into six clusters by cluster analysis, which forms the basis for policy making.     

The legal environmental risk analysis (LERA) sample of mining and the environment in Turkish legislation

As advancing technology and increasing demands for natural resources continue to mount pressure on the environment, environmental conservation and sustainable management have become ever more important. Individual countries have been increasingly taking action to reduce environmental destruction caused by human activities in an attempt to find a balance in between the necessary exploitation of resources and environmental conservation. In Turkey, the struggle between environmental conservation and mining activities is set within the legal context, with the requisite legal regulations (which describe various procedures) in the midst of being updated or renewed. The legal environmental risk analysis (LERA), beginning by discussing the main legal regulations of environmental conservation in relation to mining activities, defines basic environmental components which form the basis of environmental conservation in relation to mining, and analyzes the impact of mining on each component. The analysis (LERA) finishes with an evaluation of the components as they currently stand and makes some suggestions for the improvement of insufficient regulations.     

The supply behaviour of state mining enterprises: A case study of the Jordanian phosphate industry

An important feature of export-oriented production in mineral-rich developing countries for almost three decades after 1960 was the growth of state-owned enterprises. For the phosphate industry, this was reflected in the expansion of companies such as Office Cherifienne des Phosphate (OCP) in Morocco and the Jordan Phosphate Mines Company (JPMC). There was a strategic importance of the industry for these nations and the large capital outlays necessary for phosphate and fertilizer production expansion often required considerable government assistance because of the perceived high risks of private investment in the industry.     

Green accounting and sustainability of the Peruvian metal mining sector

This paper estimates the true economic income of Peru’s metal mining sector for the period 1992–2006, using a model of green economic income based on Hamilton (2000). The total depletion of natural capital caused by metal mining is calculated by estimating, on the one hand, the depreciation of mining resources (using the Hotelling rent approach) and, on the other, the environmental degradation provoked by metal mining activities. The results show that the total loss of natural capital represents between 31% and 51% of the metal mining GDP and between 2% and 4.9% of Peru’s GDP. On the other hand, correcting the usual GDP measure produced by the traditional National Account System (NAS) for the total loss of natural capital caused by mining activities shows that the GDP traditional measure overestimated by 51–64% the true economic income generated by Peruvian's metal mining sector during the period 1992–2006. The importance of the generation, taxation, and disposition of mining economic rents for Peru’s sustainable development in the future is also discussed.     

Corporate Social Responsibility and development in Africa: Redefining the roles and responsibilities of public and private actors in the mining sector

This paper revisits the role of Corporate Social Responsibility (CSR), suggesting the usefulness of adopting a holistic and historical perspective. It underlines the importance of taking into account the evolving regulatory frameworks within which mining activities take place in order to consider the changing roles played by the various actors involved, whether multilateral, national or local, public or private. In this broad context it then becomes possible to revisit issues of legitimacy, responsibility, and accountability, which CSR strategies aim to address. The article draws attention to the shortcomings of strategies, whether bilateral or multilateral, public or private, which, in an attempt to respond to problems of risk and legitimacy faced by mining companies, have put forward measures in the name of CSR that do not address the origins that give rise to such problems and, in so doing, tend to mask the very nature of the difficulties at hand. The analysis leads to quite different conclusions as compared to those that result from the adoption of a shorter term and investment-led perspective.     

Linkages in Ghana's gold mining industry: Challenging the enclave thesis

By 2009, Ghana was the second-ranked African producer after South Africa, and had become the world's ninth largest producer of gold, at some 3.8% of global production, up from 2.6% five years earlier. Gold production volumes and revenues rose significantly over the decade from 2000. Yet gold mining tends to be perceived negatively in Ghana, and is seen as providing far less than it should in terms of public revenue, employment, skills development and spillovers, and localised economic development. Gold mining is often depicted as having an enclave status, disconnected and isolated from the rest of the economy. In contrast, the research findings here demonstrate that after a period of strong investment and growth, gold mining can no longer be viewed as an enclave activity: it is in fact more deeply linked into the Ghanaian economy than hitherto understood, through a set of as yet under-researched but promising economic linkages, notably backward linkages, which can potentially be strengthened by policy and support measures.     

Social dimensions of mining: Research,policy and practice challenges for the minerals industry in Australia

The social dimensions of the mining industry are increasingly acknowledged as critical to business success, yet remain the least understood aspect of the business concept of sustainable development—the ‘triple bottom line’ of economy, environment and society.     

Economic and social effects analysis of mineral development in China and policy implications

Mineral development has contributed greatly to China's economic and social development. Many challenges remain, however, including environmental pollution and resource waste in practice, as well as a dearth of systematic theoretical research. The goal of this study is to analyze the economic and social effects of various mineral developments in China from diversified perspectives, so as to provide the basis for the formulation of China's mineral development policy. The input–output effects, industrial linkage effects and income distribution effects of different mining industries are quantitatively analyzed by adopting basic hypotheses of input–output economics, industrial linkage model and income distribution antitheses based on the latest available official data from China Statistical Yearbook from 2004 to 2010 and the 2007 Input–Output Table of China. The empirical results obtained in this study indicate that all mineral development industries, especially coal mining and washing, and petroleum and natural gas extraction industries, have given a strong impetus to the increase of China's fixed asset investment and GDP. Moreover, they have provided a large number of jobs, thereby alleviating ongoing employment pressure, and they have also played a positive role in promoting China's technology investment. The analysis of industrial linkages demonstrates that mining industries are basic to the national economy and produce a significant impetus to its downstream industries, but create weak pull effects in terms of national economic development. From the perspective of income distribution, mining industries play an important role in increasing China's fiscal revenue and per capital income. Hence, China's mineral development policy should (1) encourage additional investment in technology for exploration and development to insure sufficient supply and expand the input effects; (2) attract additional talent to work in remote regions; (3) optimize the industrial structure and promote the industrial transformation in resource regions; (4) adjust the interest distribution between the central and local governments to enable the local regions to become more self-sufficient; and (5) enhance the legal environment so that companies can more readily undertake their social responsibilities voluntarily.     

From landfill to water,land and life: The creation of the Centre for stone materials aimed at secondary processing

This paper focuses on the creation of a Centre for the recycling of stone materials. The Centre will be able to offer a range of activities amongst which is the improvement of the production chain of the Orosei Marble district in Sardinia, Italy. Several companies operate within the marble producing area, specializing in both quarrying and stone processing. They have formed a Consortium in order to rehabilitate an area of more than 17 ha. The restoration will be carried out through an environmentally sustainable procedure. The area was previously used as a landfill for waste deriving from marble quarrying and processing. At that time unshaped blocks of various sizes (which are unsuitable to block-cutter sawing), waste deriving from both block sawing and slab/strip cutting (such as broken slabs, strips, tiles) and microfine dust from filter presses of water treatment plants were representing an environmental problem. The local administration was struggling to find new areas which could be used for landfills, resulting in an additional cost for the landfill, ultimately affecting the variable production costs. The project involves the building of a venue to be used for temporary storage, treatment of wastes produced by both quarrying and primary processing, in order to make them suitable as secondary raw materials. The project also deals with the catch basin hydrology of the area involved in the project, the building of a multifunctional centre, the landscaping and other environmental features such as vehicle traffic and slopes greening.     

Predicting the economic and demographic impacts of long distance commuting in the resources sector: A Surat basin case study

Predicting the economic and demographic impacts of resource development on regional areas is difficult to assess because of limited availability of analysis, difficulties of predicting where workforce are likely to be based, and different impacts on communities because of variations in size and economic structures. In this study modelling has been employed to identify future employment and demographic impacts of future resource developments on communities in the Surat Basin in southern Queensland, Australia. The analysis summarises potential employment increases over multiple projects and uses multipliers from Input–Output models to assess likely impacts by local government area when future workforce might commute to or live locally in the region. The results demonstrate that recent moves to commuting workforces limit the economic impacts on local and regional communities in complex ways.     

Natural resources dynamics: Exhaustible and renewable resources,and the rate of technical substitution

In this paper we study both exhaustible and renewable resources in an endogenous growth model. In particular, we consider the hypotheses in which the rate of technical substitution (RTS) between those two inputs is or is not equal to one. Moreover, we depart from a basic theoretical framework to account for the negative externality constituted by waste accumulation. Finally, a comparative analysis is made between Pigouvian tax and waste recycling, as an environmental policy to correct market failure represented by refuse accumulation.     

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.     

Artisanal and small-scale gold mining in Burkina Faso: Suggestion of multi-agent methodology as a complementary support in elaborating a policy

In order to better manage artisanal and small-scale gold mining, the Burkinabe authorities have planned to build a suitable methodological support as an aid to elaborating appropriate policies and actions. The developed methodology concerns (a) at a spatial level, the generation and analysis of a geological resources map needed by the artisanal miners and (b) at a socioeconomic level, analysis of the miners' activity. This paper reports and discusses the results of our suggestion to also introduce the use of an approach known as multi-agent system (MAS) as a complementary part of this initial methodology, at a downstage level to the above two analysis stages. MAS methodology could be used to develop simulation models to forecast the future of the activity. MAS is appropriate for describing the dynamics of systems where it is impossible to obtain all output data of a model from a purely mathematical or statistical transformation of input data. Our suggestion involves (i) demonstrating the capacity of the approach to simulate all parameters needed by mining policy makers and (ii) evaluating to what extent the methodology is accepted by them, as well as, at a more scientific level, the literature regarding mining system simulation.     

How have reforms fuelled the expansion of artisanal mining? Evidence from sub-Saharan Africa

This paper investigates whether and how World Bank mining sector reforms have fuelled the expansion of illegal artisanal mining activity in Sub-Saharan Africa. In doing so, the analysis examines three issues. First, the emerging correlation between reforms and poverty, mainly a result of increased unemployment caused by Structural Adjustment Programmes and concurrent privatisation of state-owned enterprises, is explored. Second, the possibility that reform of large-scale mining has decreased available land for peasant farming as well as legalised small-scale mining activity is discussed. Finally, the notion that the regularisation of informal mining activities has been an exceedingly bureaucratic procedure in Africa, therefore providing individuals with little incentive to operate within the legal domain, is examined. Faced with few employment prospects, a growing number of Africans are pursuing employment in the artisanal mining sector, a worrying prospect given its intimate association with environmental degradation and HIV/AIDS.