Economic and Financial Toll
Economists have shown that heavy reliance on mining is not a good long-term national economic strategy.
Mineral-rich developing countries have some of the slowest growth rates and the highest poverty rates in the world- a phenomenon economists call "the resource curse." Harvard economists Jeffrey Sachs and Andrew Warner studied 95 developing countries that were minerals exporters for the period 1970 to 1990. They found that the higher the dependence on natural resource exports, the slower the per capita growth.
Mining is no longer a strong generator of jobs. It accounts for perhaps 0.5% of the world's workforce -- about 11 million people.
Costs of Profit
Few countries have effective measures in place to hold mining companies financially accountable for the damage they cause. Even in the United States, the antiquated 1872 Mining Law leaves the burden of abandoned mine clean-up to the taxpayers.
Mining companies in the United States have underestimated the costs of closing their operations at as much as $72 billion. When that happens, taxpayers have to step in to pick up the tab.
Taxpayers Pay the Price
In January 2000, a tailings dam at the Baia Mare mine in Romania split open. The results were massive:
- more than 100,000 tons of wastewater laden with cyanide and heavy metals flooded into the Tisza river, and eventually into the Danube
- more than 1,400 tons of fish were killed
- the drinking water supply of 2.5 million people was contaminating
Faced with skyrocketing cleanup costs and only partially covered by its insurance, Esmeralda Exploration Ltd.- the Australian company that held the principal interest in the mine- went into a form of bankruptcy to protect its shareholders. Unfortunately, the citizens of the countries affected received no such protection.
For more information:
- Earthworks Metals and the Wealth of Nations. A section of Dirty Metals: Mining, Communities and the Environment
- Investopedia defines the resource curse
- Earthworks Abandoned Mines
- BBC Report on the spill at Baia Mare
- BBC Follow up Report on effects of the Baia Mare spill
- Summary of the UNEP/OCHA Report on the Cyanide Spill at Baia Mare, Romania