The problem is the absence of capitalism
The Guardian is very concerned about mining:
The Guardian view on the scramble for critical minerals: while powers vie for access, labourers die
Editorial
A mining disaster in the Democratic Republic of Congo underscores the human cost of extraction. Intensified competition for resources isn’t helping
It’s fair to be worried about this. Hundreds have died just recently in a series of flood driven cave-ins at one area of mining in DR Congo, just as the one example.
The problem is, of course, the absence of capitalism. For these mines are what are known as “artisanal” mines. This means mines being dug and operated by the literally dirt poor locals with pick and shovel. The miners make $3 and $4 a day which is, in that locality at this time, good money. The problem is not minerals, nor our desire for them, it’s that these people are living in a time and place when $4 a day looks like good money for life endangering work. The problem is the economy around the mines, not the mines themselves.
The US – and others – are trying to counter the dominance of Beijing, which was far quicker to grasp the strategic importance of such resources. Key to its plan is a deal touted as a way to bring the DRC wealth and create incentives for peace. Few on the ground are convinced. The deal does nothing to help the DRC build processing capacity and requires it to freeze its tax and regulatory regimes for a decade.
Hmm. Those “few on the ground” would include the likes of Global Witness who are at least partially responsible for the last attempt to deal with this - under Dodd Frank - in a manner that was wildly expensive and also lowered the wages those miners get. You know, the solution that didn’t solve? Processing capacity is also a fun one. To process “coltan” you need to use hydrofluoric acid to separate the tantalum and the niobium. That’s not something you do at a whim - being splashed (quite literally, only splashed on the skin) with HF leads to death in about 20 minutes. Best done in a place with the great big developed supply lines - including the necessary medical care. Not that we know this but we’d certainly believe that sub-Saharan Africa’s production of HF - north of South Africa itself - is about zero.
But it’s possible to explain this visually:
Congo coltan mining
That’s an artisanal mine, with those miners risking life and limb for that $4 a day.
Capitalist mine
That’s a capitalist mine. We can see the capital right there. $20 million of capital say, and three blokes. All three blokes getting much more than $4 a day because, of course, their labour productivity is so much higher, so much capital are they employing.
The solution to the conditions of mining problem is to introduce proper capitalism into the mines. Rent the concession out to one of the global mining giants and we’re done.
But, umm, we can all see The Guardian, Global Witness and the rest running with that as an idea, can’t we? However, it is still true. Some of the problems people whine about are because of an absence of capitalism. Thus the remedy to those problems is obvious enough.
Tim Worstall