Here from this link, a few observations on the bad & good of mining—at least in Australia:
Fact is, mining’s so hugely capital-intensive that though it now accounts for an amazing 10 per cent of GDP, it still accounts for a mere 2.4 per cent of total employment.
The size of an industry’s economic contribution is determined not by the number of jobs it creates directly, but by the amount of income it generates. And even with falling coal and iron ore prices, our miners are still highly profitable because their efficiency, plus the quality and accessibility of our mineral deposits, mean their marginal cost of production is far lower than that faced by miners in most other countries.
What the mining bashers miss is that when all the income generated by an industry is spent, it generates jobs throughout the economy. This includes the income the industry pays in tax, which generates jobs when it’s spent by governments.
In the case of mining, however, there’s a weakness in this argument. For the income earned by an industry to generate jobs in Australia, it has to be spent in Australia. And our mining industry is about 80 per cent foreign-owned.
Got the message yet? For our economy and our workers to benefit adequately from the exploitation of our natural endowment by mainly foreign companies, our government has to ensure it gets a fair whack of the economic rents those foreigners generate.
This, of course, is the justification for the minerals resource rent tax. And the fact that, so far, the tax has raised tiny amounts of revenue doesn’t mean mining is no longer highly profitable, nor that the tax isn’t worth bothering with.
This is all a bit of a nationalist meander. Not sure what it all means. Maybe that mining is good as long the mines pay taxes and the tax money is spent by the receiving government. Maybe it implies that no matter how few jobs are generated by mining, as long as mining generates tax income. And that the government of the mining country gets its fair share of mining profits, all will be well with the economy,
Do these arguments apply in Canada, the USA, and in so many Central and South American countries? In Africa the income from mining generally goes to politicians, so no issues there that need detain us.
What comes to mind is the question: if national governments like that of Australia do not get their fair share of mining income, then where does it go? Does it all go to London? Or Switzerland? Or to oil magnates from Arab countries? The profits of mining benefit somebody. If not Australians, then who? Can’t be me and my few investments.