Phillip Crowson

The Resource Curse: A Modern Myth?

This chapter concentrates on the economic importance and impact of mineral development rather than its social and environmental effects. It first examines statistics on mineral dependency, demonstrating that many commonly used measures underestimate the contribution of minerals to economic activity. It then looks at the ways in which the development of mineral wealth can affect resource-rich countries for good or ill. Some historical examples of mineral development show that the issues raised today were no less relevant in times past. Changes in transport and communication technologies, and in the capital intensity of minerals extraction and processing over the past century and beyond have, however, reduced the prospects for strong multiplier effects of mining in many host countries. Far more than in the past, the main economic benefits to host countries are likely to be through their fiscal receipts and capture of mineral rents. The extent to which those benefits are realized consequently depends on the nature of their institutions and governance.

The Economics of Current Metal Markets

Less than 2 years ago the general view, as expressed in the International Monetary Fund’s World Economic Outlook, was that the global economy would suffer but a mild correction in 2008 and 2009 and that the strong economic expansion then under way would soon resume. This expansion, spearheaded by rapid growth in China and other emerging economies, was fuelling buoyantly rising demand for all raw materials and forcing up their prices. Most commentators subscribed to the belief that the mineral industries were embarking on a period of sustained prosperity such as they had allegedly not witnessed since the 1960s. Such is the stuff that dreams are made on!

Geographical shifts in the competitive strength of mineral production since 1960, and their causes

Abstract The strong influence of resource endowments, the depleting nature of ore extraction, and relative costs on patterns of location of mineral production are illustrated by reference to copper. Determined managerial action can offset seemingly immutable trends in competitiveness as the experience of the US copper industry in the 1980s demonstrates. Changes in the nature and pattern of demand are perhaps less obvious but important factors, again illustrated by copper. Evolving shares of world production of six other minerals are described to demonstrate other determinants of location. These include particularly transport and energy costs, and a wide range of government policies.

The European mining industry: What future?

Abstract Europes mining industry has a long, profitable and varied history. Now held in low regard for largely fallacious reasons, it faces many challenges. In reality, its spread and diversity surprise. Although Europes mining industry accounts for a small share of GDP, it provides a significant share of the global production of many products. The European industry stands favourable comparison with that of the USA. It is relatively weak in many metallic products, and has a strong industrial minerals bias. Some features of the industry flow from its long history. These include a legacy of state ownership and incipient protectionism, as well as complex land ownership and mineral rights. Exploration spending is relatively low for readily understood reasons, but Europe does have many prospectively good projects, even in metals. The main obstacles are in the arena of planning controls and environmental regulation, which are global rather than specifically European issues. The future of Europes mining industry is no different from that of the world as a whole.