The public good dilemma of a non-renewable common resource: A look at the facts of artisanal gold mining

Millions of people worldwide are involved in artisanal and small-scale gold mining. Many of them live in conditions of poverty and insalubrities due to the mercury amalgamation of gold and the application of other rudimentary techniques. In spite of this, the sector has been nearly overlooked by resource economists. In this paper we analyze the sector based on a survey of the existing literature. We find some commonalities of artisanal and small-scale gold mining in different countries of the developing world as follows: low levels of mechanization and technology, labor intensiveness, low awareness of environmental degradation, poor training, high transience among some miners, and lack of financial savings. Moreover, with these commonalities in mind, we present some topics and challenges for a research agenda in the field of environmental, ecological, and development economics.     

The environment of the mining industry: An industry view

Finance and investment, technological development, government legislation and fiscal policies, public attitudes and aboriginal lands, are among the major issues confronting the Australian minerals industry. Within this context the author discusses the significance of the industry to the Australian economy and assesses its potential.     

The dilemma of flood control in the United States

In spite of increasing annual expenditures for flood control, losses from flooding continue to rise in the United States. This seeming contradiction arises from overdependence on federally supported structural solutions to flood problems. Nonstructural controls are initiated reluctantly at local levels of government because of constitutional questions, restrictions of local tax bases, lack of federal subsidies for nonstructural solutions, and the high costs of delineating flood hazard areas. The success of the National Flood Insurance Program is doubtful since only about five percent of the flood-prone communities in the United States have qualified for the regular program. Future reduction of flood losses is dependent upon increasing popular awareness of flood hazards and altering federal subsidy policies to reduce the impact of local land-use regulations.     

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 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.     

Small-scale mining in Ghana: The government and the galamsey

This paper argues that the current formalization system for small-scale gold miners in Ghana has been undermined and the small-scale mining laws no longer capture the reality of the sector’s activities. The paper will examine the small-scale mining system and shows that registered and unregistered actors operate not only in parallel but are actually intertwined and highly dependent on one another. The paper shows that the perceived dichotomy of formal and informal actors in the sector does not actually exist. The sector has instead evolved into a highly intertwined group of semi-formal sectors operating with varying degrees of legal registrations. The paper concludes that political leniency and law enforcement corruption has resulted in a booming small-scale gold system under poor government control. The paper recommends that politicians move to enact reforms to regularize the small-scale mining sector and curtail ubiquitous environmental and occupational safety problems. Anti-corruption initiatives and law enforcement reforms are the most urgent. However, reforming the laws is also necessary to capture and regulate the technological innovations the sector is currently using.     

The case of artisanal mining in Bolivia: Local participatory development and mining investment opportunities

Despite the buoyant expansion of Latin America's mining sector, the small-scale mining sub-sector remains marginalized. For many countries with small-scale mining resources, the way forward to sustainable mining development is not clear. Activities, in far too many cases, have led to environmental damage, social inequity and political violence among mining communities. This article, through a case study of the Bolivian Altiplano, seeks to advance the understanding of the conditions that drive mining communities into the chain of events of impoverishment associated with environmental damage. It also examines the opportunities for sustainable human development among these communities. In Bolivia's mining sector, social inequity is pervasive and holds the mineral resources captive. This situation is further aggravated by the fact that solutions, in the short term, are uncertain. Unresolved social inequity compromises foreign direct investments since social considerations are becoming increasingly important to mining corporations when deciding whether to invest. This article outlines a preliminary strategy to move forward on social inequity. The strategy revolves mainly around implementing alternative sustainable livelihoods with the participation of the government (central and local), the private sector, NGOs and donors as facilitators and partners. Its aim is to reduce the number of families eking out a living from artisanal mining in order to enhance the viability of small-scale mining. It is hoped that, as social inequity decreases throughout the sector, the increased stability will enable stakeholders to consider foreign direct investments within the framework of the country's sustainable human development goals.     

Mining pollution: The case of the Baguio mining district,the philippines

Environmental problems caused by improper mine tailings disposal in the Baguio district include pollution of the Lower Agno River system and its watershed and siltation of irrigation canals in the Pangasinan plains. Direct economic losses are from reduced agricultural production due to siltation of irrigation works and farmlands. To check the adverse ecological effects of improper mine tailings disposal, government regulations have been imposed on mining firms. Several disposal schemes have been proposed, including the use of the reservoir of a multipurpose project to be sited in the watershed where the mines are located. Because of siltation problems, however, trapping the tailings in the reservoir will diminish the economic benefits that can be derived from the project.     

The evolving structure of the European mining industry

A major restructuring of the mining industry has been going on since the early 1980s. Using 11 important minerals this paper analyses the changing pattern of control in the mining industry for European based mining companies. In general, European mining companies have increased their control over mineral production worldwide while North American based companies have shown a decline in control of production. Production of European state-owned mining companies has declined as a result of privatization.     

The mining industry and the natural environment

Environmental considerations have become central to future developments in the Australian mineral industry and have affected the level of federal involvement in the industry. The Environmental Impact Statement (EIS) is now an important stage in the assessment of proposed mining projects. This paper examines two major federally sponsored inquiries into Australian mining projects — Fraser Island sand-mining and the Ranger uranium project — and then discusses subsequent events and future prospects.     

The current status of the US mining industry

The US economy annually needs over 4 billion tons of new mineral supplies. The value of domestically produced energy and processed materials of mineral origin exceeds $175 billion annually, but domestic production of both raw and processed minerals is not keeping pace with demand.     

The interest of OECD countries in ICAs and the Common Fund

This article explains that the nature of commodity price determination and the characteristics of the link between commodity prices and prices of manufactured goods are such that they have an inflationary and recessionary impact on the world economy. Subsequently, it argues that International Commodity Price Agreements (ICAs) and the Common Fund are not only in the interest of developing countries but are also in the vital interest of developed countries. They assist in stabilizing economic activities and sustaining recovery at a higher rate of growth of output and employment in these countries. Nevertheless, to be effective for these purposes, ICAs should cover a wide range of commodities and adequate financial resources should be available to the First Account of the Common Fund.     

The role of co-products in stabilizing the metal mining industry

The objective of this paper is to test the hypothesis that cyclical metal mining activity is more stable when multi-metal products are produced. A theoretical short-run supply curve for a metal is developed showing by-product, co-product, and main product behaviour. This curve is used to illustrate co-product pricing trends that are indicative of different cyclical behaviour patterns. The non-parametrical sign test is used to test co-product price trends for the US metal mining industry. The results indicate that multi-metal production stabilizes the mining industry in the short run but not in the long run.     

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 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.     

A dangerous bet: The challenges of formalizing artisanal mining in the Democratic Republic of Congo

Among policy-makers and governments, there is a broad consensus that artisanal and small-scale mining (ASM) needs to be ‘formalized’ – embodied in a standardized legal framework that is registered in and governed by a central state system-, the basic condition being that artisanal miners are given formal property rights. This article aims to contribute to this discussion, drawing on a case study from the Eastern Democratic Republic of Congo (DRC), where it is estimated that up to 90 percent of mineral production and export is ‘informal’. After having pointed out some of the theoretical assumptions behind the formalization canon, we study the challenges of formalizing the mining sector in the DRC. Next, we provide an in-depth analysis of one concrete policy measure of the Congolese government, the temporary ban on all artisanal activities. We argue that the mining ban was not only a radical example of a top-down formalization policy, but also an illustration of a bureaucratic and technical measure that compounds but does not address different problems associated with ASM: conflict, informality, poverty, illegality, state control. Looking at the empirical evidence from the DRC, we argue that these kinds of technical solutions can never address the broader socio-economic and political issues at stake.     

The Environmental sustainability of mining in Australia: key mega-trends and looming constraints

At first ‘sustainable mining’ could be perceived as a paradox—minerals are widely held to be finite resources with rising consumption causing pressure on known resources. The true sustainability of mineral resources, however, is a much more complex picture and involves exploration, technology, economics, social and environmental issues, and advancing scientific knowledge—predicting future sustainability is therefore not a simple task. This paper presents the results from a landmark study on historical trends in Australian mining, including ore milled, ore grades, open cut versus underground mining, overburden/waste rock and economic resources. When complete data sets are compiled for specific metals, particular issues stand out with respect to sustainability—technological breakthroughs (e.g. flotation, carbon-in-pulp), new discoveries (e.g. uranium or U), price changes (e.g. Au, boom/bust cycles), social issues (e.g. strikes), etc. All of these issues are of prime importance in moving towards a semi-quantitative sustainability model of mineral resources and the mining industry. For the future, critical issues will continue to be declining ore grades (also ore quality and impurities), increased waste rock and associated liabilities, known economic resources, potential breakthrough technologies, and broader environmental constraints (e.g. carbon costs, water). For this latter area, many companies now report annually on sustainability performance—facilitating analysis of environmental sustainability with respect to production performance. By linking these two commonly disparate aspects—mining production and environmental/sustainability data—it becomes possible to better understand environmental sustainability and predict future constraints such as water requirements, greenhouse emissions, energy and reagent inputs, and the like. This paper will therefore present a range of fundamental data and issues which help towards quantifying the resource and environmental sustainability of mining—with critical implications for the mining industry and society as a whole.     

Voluntary or mandatory environmental auditing in the european community: The carrot or the stick?

One possible route to responsible environmental management now under active discussion in the European Community (EC) is a European-wide environmental auditing program. The issue currently being debated by the EC's policy body is what form the program should take—mandatory or voluntary. Whatever the final form of the regulation, environmental management is about to gain added significance in boardrooms throughout Europe and the environmental auditing industry is about to experience a dramatic period of growth in the EC.     

The dynamics of artisanal and small-scale mining reform

Artisanal and small‐scale mining are activities that have long been established in many developing countries, employing millions of people globally, either directly or in affiliated industries. Also, such activities are deplored for their adverse environmental impacts and their general avoidance of governments, tax collectors and other regulators. Decades of work have gone into addressing these problems, but with limited overall progress in evidence. Going back to some of the key dynamic relationships involved in artisanal mining and small‐scale mining, the need for policy reform that gives consistent and effective incentives is argued to be the foundation on which other discussions about environmental protection, sustainability and livelihoods can be built.     

Efficient taxation of resource income : The case of copper mining in British Columbia

This article continues previous research by the authors into the economic efficiency of two actual tax systems, one relying on a mining profits tax and the other on a gross royalty. The relative efficiency of the royalty-based taxation system is found to be conditioned by the share of resource income sought by the province: at low tax rates there is little difference between the two systems, while at high rates the royalty system is markedly less efficient. The efficiency comparisons are quite consistent over different expected price levels. However, they are influenced significantly by the flexibility of mining operations, which in practice is associated with the ability to produce ore systematically in order of diminishing quality. Curtailed flexibility renders the royalty-based system relatively less efficient.