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Ejdemo et al. (2014) have calculated location quotient (LQ), i.e., a measure of regional specialization,Footnote 4 for different industrial sectors in Norrbotten. The location quotients were calculated using data for the year 2012. This ratio illustrates the concentration of regional employment in specific industries compared to the national average for that industry (Leigh 1970). If the ratio for a particular industry is equal to one (1), it means that the industry has the same share of total employment at the regional level compared to the national level. In Norrbotten, the extraction of minerals has a location quotient of 19, thus indicating how far specialized the county has become in the mining sector in terms of employment. Specifically, this shows that the share of mining employment out of total employment is 19 times higher in Norrbotten compared to that of the country as a whole. Performing the same calculation for Västerbotten with data for 2012 yields a corresponding location quotient of 3.9. This shows that mining represents an important specialization also in Västerbotten, but regional employment is not nearly as concentrated to mining there as it is in the county of Norrbotten.
Forward linkages imply that the minerals from the mining industry can be used as a raw material in another local industry, i.e., downstream activities such as processing, refining, and fabricating the crude ores and concentrates. For instance, in Sweden, the mining industry supplies the steel industry with iron ore.
In a first step, we consider the overall impact of the mining industry in northern Sweden by merging all 16 non-mining sectors into one aggregate. Three different specifications of this kind are analyzed. The first one includes all municipalities in Norrbotten and Västerbotten. The second model specification only includes municipalities in both Norrbotten and Västerbotten that host mine deposits. There are in total 10 municipalities with direct mining employment, and in this case we are interested to see if the results change when analyzing only the municipalities that are most directly affected by the mining. Finally, the third and last specification focuses on all municipalities in Norrbotten only. The largest mines are located in this county, and as indicate above, most of the mining employees reside in Norrbotten.
The result for the four different sectors illustrates that the sector private services is most affected by new jobs in the mining industry in northern Sweden. This result is not surprising given that private services include retail trade, transport, and hotels and restaurants. Thus, when more people are employed in the mining sector, they have more money to spend on local retail trade, something which increases the number of employees in this sector. Transports are also included in private services, and when the mining industry expands, demand for more transportation increases because more goods need to be moved to and from the mines. Hotels and restaurants are also included in private services. In the presence of more mining employment people will have more money to spend on restaurants. In addition, it also implies more business travels to the mine site in terms of consultants, prospective customers, and entrepreneurs.
The results do not indicate that there are statistically significant linkages between employment in mining and in the other three aggregates: industrial sector, business sector, and government services, except for in the mining municipalities where the industrial sector also benefitted from growth in mining. In the case of the industrial sector, there is an intuitive linkage since the construction industry is heavily involved in work related to the large mining investments that have taken place in northern Sweden during the last decade. The construction industry in the region added 6331 jobs between 2003 and 2013, but in this analysis, the employment effect may be offset by the loss of 4084 jobs during the same period in manufacturing, which is also included in the industry aggregate. Another possible explanation is that firms that participate in mining related activities may be located outside mining municipalities and even in other regions not considered here. This may in particular be true for highly specialized and knowledge intensive services such as technical and environmental consulting.
Overall, these results show that mining has a relatively strong positive impact on non-mining employment, but the impact appears to be limited mainly to the private services-aggregate. In the long run, technological progress will continue to reduce the amount of workers required to operate a mine, and this suggests over time diminishing spillover effects on the local economies. Communities and regions that depend on mining need to identify and implement strategies to face these challenges. These may comprise efforts aimed at achieving economic diversification, but losses of direct mining employment may also be offset to some extent by fostering a business climate which enables growth of local mining industry suppliers, ideally developing into a mineral cluster capable of internationalization as described by Wiberg (2009). However, firms that are engaged in specialized and knowledge intensive activities such as technical and environmental consulting may face challenges in attracting skilled labor to relatively remote mining communities.
The main purpose of this paper has been to assess the mining-deduced job multiplier for northern Sweden, using an ex post approach based on actual employment data. An important motivation for this research is to evaluate if previous ex ante estimates for the job multiplier assessed in this area have been sound. The results overall illustrate that there is a positive statistical relationship between increases in the number of employees in the mining sector and changes in the number of employees in other sectors in northern Sweden, as about one new job in the mining sector produces almost one new job in other sectors in the region. The estimates for the job multiplier from this ex post approach are further found to be similar to the estimates of job multipliers from previous input-output studies applied in this region, which are based on an ex ante approach. This result is reassuring since it implies that the earlier studies of the job multiplier of mining in Sweden, discussed in this paper, have not been providing misleading ex ante estimates of the employment impacts following new mining activity.
Regarding where the new jobs are created, in response to new jobs in the mining industry, we find that the private services sector is particularly affected. The private services sector includes employment in retail trade, restaurants and hotels and the increase in employees in this sector is not surprising given that these sectors are local, and if income from employment increases in a region, the private services sector often benefits the most from people with more money to spend. This result is also interesting as it implies that the results from the recent mining boom in northern Sweden did not suffer from fly-in/fly-out effects, as a significant increase in the number of employees in Norrbotten is found. Further, it is found that in the mining municipalities, the industrial sector also benefitted from growth in mining. This is also intuitive since the construction industry is heavily involved in work related to the large mining investments that have taken place in northern Sweden during the last decade.
Finally, we would like to stress that in the long run, technological progress will likely continue to reduce the number employees required to operate a mine, and thus also reduce the spill-over effects of mining on the local communities. It is therefore important that communities and regions dependent on mining diversify their economies, and perhaps seek strategies to create so-called mineral clusters which are better equipped to face the challenges faced by mining communities with too much dependence on only extraction.
Knowledge gaps: The full number of artisanal and small-scale miners globally is not known and may be substantially greater than the current World Bank estimate of 100 million, given that a lot of ASM takes place in remote rural areas of Low-income and Lower-middle-income countries and is illegal in some places. For artisanal and small-scale gold mining the number of miners is estimated to be between 10 and 19 million. For all the different sectors of ASM accurate information on the number, gender distribution, and age distribution of artisanal and small-scale miners and on the numbers of people living in ASM communities in all countries are lacking but would be useful for planning health and social services.
Little is known about the local economic factors that impel populations to shift from subsistence agriculture to subsistence mining for their livelihood. ASM is a source of income diversification in many regions where farming is seasonal. In regions experiencing reduced crop yields as a result of climate-change-related alterations in weather patterns, it is possible that agricultural communities are already shifting to ASM for income stability. In Latin America, many native communities started to deforest and obtain minerals with local miners. However, it is controlled by the community. Better understanding of these relationships is needed, especially in supporting local development on top of governmental actions to improve climate adaptation strategies.
Generations of children in ASM villages are exposed prenatally to mercury, lead, arsenic, cadmium, cobalt, manganese or other toxic pollutants generated by mining. Children ingest these toxic materials in breast milk; they play and grow up in polluted, dusty areas contaminated by metals and other hazards; and they start to work as miners even before they reach puberty. The lifelong health consequences of those exposures are very different from the health effects for healthy adult workers. Because they eat more food, drink more water, and breathe more air per Kg body weight compared to adults, children are disproportionately heavily exposed to hazardous materials. Too little is known about the pre- and postnatal health hazards for occupationally exposed children. Clinical and epidemiological studies of children in ASM communities are urgently needed. 153554b96e
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