New Study Finds Mining Unlikely to Help Poor Countries

Posted: 23 September 2002

Oxfam to World Bank: Don’t Look to Mining to Solve Poverty

Washington, DC, September 23, 2002--The mining of gold, copper and other metals is unlikely to help poor countries escape from poverty, according to a new study released today by the international anti-poverty agency Oxfam America.

“This study shows definitively that traditional World Bank claims are wrong,” said Keith Slack, policy advisor of Oxfam America. “Historically, mining was never a significant source of national wealth in countries like the US, Canada and Australia that the World Bank claims it was. Therefore the Bank needs to honestly reassess its promotion of large-scale mining in poor countries, which often has serious negative impacts on local communities and the environment.”

The study, “Digging to Development? A Historical Look at Mining and Economic Development” comes as the World Bank, under heavy pressure from activist groups, reviews its involvement in mining and other natural resource extraction projects. The Bank’s support for such projects has been the focus of recent protests, which will occur again this week as the Bank holds its annual meeting in Washington, DC.

Written by Professor Thomas Power, chairman of the University of Montana Department of Economics, the study shows that mining was significant only after the U.S., Canada and Australia had developed other aspects of their economies. In all three countries, the industry left behind communities that were economically depressed.

Due to global trade rules that favor industrialized nations, poor countries today find it difficult to convert their mineral resources into manufactured goods and other higher value activities necessary for their own economic development.

“Developing countries need to build diversified, sustainable economies that offer real opportunities for the poor,” Keith Slack added. “Mining creates few opportunities for the poor, who generally experience its most serious negative impacts, as the World Bank itself admits. The Bank should support efforts that attack poverty directly and sustainably and that increase economic diversification; it should not create more dependence on mining."

Visit www.oxfamamerica.org/miningreport to read the full report.