Australian mining company Rio Tinto recently began operations extracting copper from an underground mining complex at the Oyu Tolgoi mine in southern Mongolia. Originally opened in 2012 as an open pit mine, the company developed the underground operation to access richer and higher quality minerals. The government has stated it would like to create a sovereign wealth fund and use the mining resources to invest in health, education, technological development, and to support new industries.
The increased production coincides with an increased demand for copper to be used in the manufacturing of electric vehicles and other electrical equipment. While the average income in Mongolia is less than $5,000 per year, the government is hoping to use the copper proceeds to reinvest in its citizens and bring incomes up to $10,000 per year by the end of the decade.
Discussion Questions:
1. What arguments might an “anti-growth advocate give against expanding mining production?
2. Discuss the accuracy of the following statement: “Investing in capital in the mining sector will come at the expense of growth in other sectors.”
Sources| AP News: https://apnews.com/article/mongolia-mine-economy-copper-oyu-tolgoi-oyun-b487fafb56b6a4b780c226983911485f; CNN: https://www.cnn.com/videos/business/2023/08/16/exp-mining-mongolia-economy-quest-pkg-081603pseg2-cnni-business.cnn; Unsplash: Photo by Bruna Fiscuk on Unsplash