MINERAL RESOURCES

 

Their Importance:

·       Essential for industrial and economic development of nations.

·       Copper, tin & iron ore were essential to the ancient metal-using cultures of the Bronze & Iron Ages. 

·       Used in construction, engineering and chemical industries.

·       Railways, computers, cars, skyscrapers etc in modern society depends upon the exploitation of mineral resources. 

 

 

 

What are minerals?

·       A naturally occurring inorganic substance.

·       Created by (natural) geological processes but transformed into mineral resources by cultural processes. 

 

 

Types of Minerals:

 

FUEL (coal, oil and natural gas) and...

NON-FUEL minerals resources.

 

NON-FUEL minerals are sub-divided into:

·       METALLIFEROUS (i.e. gold, silver iron) &

·       NON-METALLIFEROUS (i.e limestone, potash

 

Exploration for Mineral Resources:

 

Mineral exploration is shaped by geologic factors but cultural factors and other variables  define the favorable areas.  The factors include:  

·       Accessibility to major highways and railways

·       Archeological evidence of ancient metal works 

·       Historical evidence of previous mining activity

·       Accidental discoveries.

·       Availability of geological information about rocks.

·       The demand for the minerals.

 

Factors to consider in the search and exploration of minerals:

 

·       Probability of successful search

·       Initial capital expenditure and running cost for extracting, processing and marketing the mineral

·       Levels of future demand and current price

·       Political risks

·       Risks stemming from changing market conditions and the development of substitutes.

 

Reducing risks in mineral Exploration

 

Search for minerals in areas where:

·       there has been historical evidence of mineral presence

·       base maps and geological survey data are available

·       successful discoveries have already been made

·       in sectors where there is proven expertise

·       Avoid countries with record of past political instability and government restrictions on foreign investment.

·       Spreading investment sites

·       Develop known minerals through developments in technology

·       Pool resources to explore potential minerals.

 

Strategic Minerals:

·       Determined by economic importance, military necessity and accessibility to the mineral.

·       Defined from a particular national perspective so that a mineral that is strategic for one country (which must rely on imports to meet its needs) is not strategic for another country with a domestic source of supply.

 

FORMS OF GOVERNMENT INTERVENTION

 

1.   Developing Countries:

Trade in minerals is controlled by multinational companies from the developing world. To increase their share of profits from the mining of their minerals, several developing countries have taken measures including:

·       Formation of producer organizations to control supply and price.

·  Nationalization of assets of multi-national mining companies by state governments

 

2.   Advanced Capitalist Economies:

 Several mechanisms have been developed to 

 intervene in the exploration & production of minerals

 

1.  Trade Regulation:  Devised to decrease the flow

    of imports into a state.

·       import tariffs (tax on imported minerals)

·       setting premiums on volume of imported minerals through import quotas

·       total import bans and export embargos

·       import licenses.

 

2.  Investment promotion Measures:

·       Promotion drives,

·       favorable loan conditions,

·       direct trade subsidies,

·       government underwriting of private sector risks.

 

3.  Taxation:

·       Royalty tax - a levy per unit of output or a percentage of the value of production

·       Profit tax - a tax on net income or profit. 

·       Capital value tax - taxing the value of the property owned by a company

 

4.  Tax Concessions:   Granting free tax status to

     a company

 

 

5.  Price Fixing

 

 

6.  Subsidies: Direct grants and low interest loans

     to encourage companies take specific actions

 

 

7. Granting environmental regulation exemptions 

    to encourage mineral exploration.

 

Why governments may Intervene in Mining?

 

·       To ensure and support industrial growth.

·       To ensure continued economic growth

·       To make a country secure militarily by exploiting minerals for the production of arms

·       Spread economic development across the country

·       To make a country self sufficient in strategic minerals

 

IMPACTS OF MINING

 

1.  Environmental Conflicts:

·       Clash between commercial interests (Supported by people seeking employment) and groups anxious to preserve the aesthetic qualities of local lands.

·       Development of ghost towns left behind after the closure of the mining operations.

·       Clash between native people claiming land rights and international mining companies using the land for mining.

 

2.  Economic Impacts:

·       Promotion of economic growth in the country - employment, consumer goods etc.

·       Industrial development of peripheral regions - markets, transportation, energy, schools etc

·       Creation of enclaves where mining communities remain isolated from the larger society

 

Environmental Impacts:

 

·       Transporting, refining and processing of minerals creates air and water pollution. 

·       Acid drainage (from abandoned mine sites) pollute ground and surface water.

·       Mining has caused ground subsidence in such places as Long Beach, CA and Houston, Texas.

·       Surface mining creates an eyesore for mine waste (overburden or spoil).

·       Erosion of mine waste chokes streams and fills dams and reservoirs

·       Oxidation of sulfur rich rocks form sulfuric acid which flow into streams and lakes to destroy fish and habitat.

·       Water runoff from piles of spoil materials results in increased sediment load in streams and causes floods

·       Surface mining creates noise and dust and destroys wildlife habitat, at least temporarily.

·       Surface mining causes groundwater levels to fall thereby drying up municipal and agricultural wells in adjacent lands.

 

In 1977, the US Congress passed the Surface mining Reclamation and Control Act which requires reclamation on surface mined lands.