Professional Documents
Culture Documents
The major sticking point in the mining issue arises from the fact that
each stakeholder has a different view of the costs that they have to bear in
pursuing their economic objectives. When a mining firm befouls the
atmosphere, pollutes water supplies, contaminates the soil, and disturbs
the delicate geological balance in the area within and around the mining
site, the corresponding costs in terms of lower long-run economic
productivity from the mining area are borne not by the firm but by the
community. Unless these so-called external costs are factored into the
private cost-benefit calculations of the firm, mining activities will be
extended beyond levels that are consistent with the long-run interests of
society. From a social viewpoint, mining operations are sub-optimal and
therefore unsustainableIndividual mining projects are also unsustainable
from the viewpoint of the mining concessions themselves. At some point in
time, the mineral ore that is being mined is completely exhausted, or
extraction costs become prohibitive and their operations cease to be viable.
The company disinvests from its current operation and moves on to other
sites in the country or elsewhere in the world, and the community in
question is left holding the bag