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.
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.
In January 2000, a tailings dam at the Baia Mare mine in Romania split open. The results were massive:
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.