Assessing the Role of Mineral in the Economic Development of the Host Country

This paper focuses on measures of the economic significance of mineral exploitation and processing activities, such as beneficiation, refining and smelting. Empirical measures are suggested to quantify the relevance of the degree processing within a nation's mineral industry. The most useful, based on the input-output econometric framework, are used to establish the magnitude of links between the mineral industry and its satellite activities and for the appraisal of large, non-marginal projects. The input-output impact analysis is refined to allow for country specific behaviour and synthetic indices for the appraisal of investments in the mineral sector are developed. These indices are further improved with the introduction of shadow prices to incorporate socio-economic issues. They are useful to direct mineral policy decisions and several investments towards the most promising objectives for national goals. Finally traditional methods for the appraisal of small scale, marginal, mineral projects are assessed where local impact and regional development issues are more relevant than national ones.