Contribution of Mining in Global economy (Pratyush Katiyar)
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Transcript of Contribution of Mining in Global economy (Pratyush Katiyar)
Contribution Of Mining In The
Global Economy
Pratyush Kumar Katiyar 13155061IIT(BHU) Mining Engineering([email protected])7753863532
World Bank Data(Contribution of mining )
Year - GDP Growth rate ( GDP US$)
1970 - 4.29% (2.95 trillion US$)1980- 0.5% (11.15 trillion US$)1995- 2.96% ( 30.65 trillion US$)2005 - 3.82% (47.14 trillion US$)2010- 4.35% (65.6 trillion US$)2015 - 2.6% ( 73.43 trillion US$)
Year – Income from renting natural resources , %of GDP ( Comparison)
1970- 1.18% of GDP (0.035 trillion US$)1980- 7% of GDP (0.78 trillion US$)1995- 1.81% of GDP (0.55 trillion US$)2005- 4.49% of GDP (2.12 trillion US$)2010- 4.71% of GDP (3.09 trillion US$)2015- 3.92% of GDP (2.88 trillion US$)
Three sectors of Global economy
1. Industry- 30.3% of world’s GDP2. Services – 63.7% of world’s GDP3. Agriculture - 6% of world’s GDP JOHANNESBURG MINING REPORT
by MARK CUTIFANI : Mining directly and indirectly
contributes to 45% of world economy through its contribution in all 3 sectors mentioned above.
Industry- Contribution of mining
Case Study: Direct Economic Impact of Gold
Core Sector Industries There are 8 core sector industries in India:1. Coal - coal mining2. Crude oil - mining3. Natural Gas - mining4. Fertilizers – Main components are nitrogen, phosphorus and
potassium. Phosphorus and potassium are mined.5. Electricity – Coal, natural gas and petroleum(67.4% ) plus renewable
sources6. Iron and Steel – iron ore mining7. Cement – Limestone and clay mining8. Oil refinery - An oil refinery or petroleum refinery is an industrial
process plant where crude oil is processed and refined into more useful products such as petroleum naphtha, gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas.
Electricity Production :
According to World Bank data, percentage of electricity generated by coal globally is increasing continuously from 1975 to 2013 despite the recent efforts of the world to shift to non renewable sources of energy. Reasons- Cheap , good supply in global market,easier handling.
Coal (41.3%) + Natural Gas (21.7%) + Oil(4.4%) = 67.4% of electricity needs mining operations.
Alternative Sources cannot exist without mining
Solar Energy
Wind Turbines
Atrracts Foreign Direct Investment (FDI)
Mining FDI often dominates the total flow of FDI , specially in those economies which are not developed enough to attract foreign capital in other sectors. Example –
Ghana is Africa’s second-largest gold producer after South Africa, producing approximately 4 percent of the world’s gold. The mineral sector has attracted over U$2 billion investment in the form of FDI representing over 56%, total FDI to Ghana .
FDI Policy for mining in India(Under Make in India Policy) :
• FDI up to 100% is allowed in exploration, mining, minerals processing and metallurgy under the automatic route for all non-fuel and non-atomic minerals including diamonds and precious stones.
• Mining and mineral separation of titanium-bearing minerals and ores, its value addition and integrated activities fall under the government route of foreign direct investment up to 100%.
• FDI in coal mining is allowed for captive consumption only.FDI by China
FDI directly effects industrial growth in developing economies
Mining contribution in infrastructure
industrial and consumer goods industries
Iron – Primarily used in making steel which is used in machine parts, building structures, manufacturing machine tools etc.
Copper- Wiring ,motors , construction industrial machinery etc.Aluminium- automobiles, Packaging , Construction etc.Zinc- Galvanise other metals, such as iron; batteries etc.Petroleum - Gasoline, jet fuel, diesel fuel, tar ,lubricating oil etcLimestone – cement Coal - EnergyGold , silver, diamond – jewellery , cutting tools , decoration etc.Sulphur - gunpowder, matches etc. Industries cannot exist without minerals , therefore entire industrial sector
is dependent on mining , without mining, there will be no industries.
Hard to find an object around us without contribution of mining !!
Macro level Contributions of Mining All these aspects directly effect industrial growth
GHANA (gold) – 56% FDI for mining
Service sector - Contribution of mining
Employment Generation : Geneva Based International Labour Organisation Report –Developed nations – 1.5 million people in mining sectorDeveloping nations – 2.2 million people in mining sectorSmall Scale mining – 25 million peopleIndirect employment(Equipment production, maintenance ,
food ,transportation and other services including contractors and suppliers)- 150million people
All industries create this kind of spillover effect known as multipliers but mining sector generally creates higher multiplier effect than other sectors.
Provides greatest avenue for unskilled labour employment. Those who work in mining enjoy the highest wages and salaries of all
industrial sectors .Example- Mining Association of Canada states-Mining sector average annual pay exceeding $100,000 surpassed the
average earnings of workers in forestry, manufacturing, finance and construction by a range of $21,000 to $33,000 for those sectors.
Mine development leads to expansion of transportation :
Road Transport - Dumpers, trams, and trucks move minerals around mines . Rail Transport Trains transport nearly 70% of mineral deliveries in the
United States for at least part of the way from mines to consumers. Water Transport Barges transport mineral on rivers and lakes. Ships transport coal on the Great Lakes and the oceans to consumers in the
United States and other countries. Pipeline Transport Slurry pipelines move mixtures of crushed coal and
water. This method is not currently in use in the United States.
Example –The Indian Express- In 2014–2015 Indian Railways had
revenues of US$24 billion which consists of US$16 billion from freight, US$6.0 billion from passengers tickets and US$2 billion from sundry earnings . In fiscal year 2014-15, coal constituted 50% of the freight loading , so 33% revenue of Indian railways comes from coal transportation.
Similar is the case with USA , Association of American Railroads – “No single commodity is more important to America’s railroads than coal , which accounted for 38.8% of rail tonnage and 19% of rail revenue in 2014.”
Services required by mining sector
Agriculture – Contribution by mining
PROVIDES FERTILIZERS :Plants rely on three essential nutrients –
nitrogen , potassium and phosphorus.Potassium and phosphorus are mined and
applied through fertilizers .(China is the largest producer of phosphate and
Canada is the largest producer of potash)
Corporate Social Responsibility projects :Newmont Mining Corporation’s AGGI program( Ahfo Agribusiness Growth
Initiative) : Provided training to 1,368 farmers to increase agricultural productivity and farm
business skills. Bulga Coal Mine , Australia Initiative : Promoting viticulture and water resources . Such corporate social responsibility projects with farming friendly initiatives may
contribute significantly in the development of agriculture sector. Mishra and Pujari :Case Study in State of Odhisa(2008)
: Effect of mining on the life of the surrounding villages showed
improvement in the livelihood of farmers with increased per capita income.
Improves infrastructure and rural connectivity : Peru Mining Study report illustrated that new roads constructed for the Yanacocha Peru mining operation decreased the time it took for farmers to reach markets as well as decreasing their transport costs
Allegations against mining by farmers Mainly due to acquisition of land for mining operation and
pollution of water by mining.Land used for mining
USA – 0.1 % Canada- 0.01 % Peru – 0.08 % Australia- 0.26%
Similar is the case with water resources.(USA -1% of total water consumed and Australia – 2-3% of total water consumed)
Mining uses very less land and water resource of a nation. But still , Resettlement and rehabilitation of people is a matter of primary concern . Water treatment plants should be properly monitored and required attention for water quality management should be given.
Besides this , the contribution of mining to agriculture is significant as explained in the previous slides.
Mineral Education Coalition Report 2015
Minerals are so basic to human need , just after food that life without mining is difficult to imagine in today’s world