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mining exploitation

As a result, such countries are prevented
from being able to fully absorb the
financial returns generated from their
national resource endowments.
The continent of Africa in particular has
historically accounted for a significant
portion of global extractive production
and supply, serving as a catalyst for the
economic development of the Global
North through low-wage labor and
corporate ownership of the region’s
natural resources.
Who Controls the Global Extractive and
Mining Industries?
Over the past several decades,
multinational corporations have emerged
as the primary actors in facilitating global The term “rent-seeking” is used degree of market concentration in the
trade and natural resource extraction, by economists to describe a type of profit- global mining sector. This claim is further
yielding tremendous profits. making scheme, the sort made possible supported by a report conducted by
when individuals or corporate entities Chatham House , which found that jointly,
Large corporations, which account for the
bulk of international trade and resource are granted exclusive or majority rights to the four largest companies in iron ore,
extraction, have experienced rising rents natural and/or non-natural assets. bauxite, and copper mining control 41
under hyperglobalization, leading to Thus, the phrase is frequently associated percent, 41 percent and 31 percent,
heightened profits. This was confirmed with monopoly (or quasi-monopoly) rent, respectively, of global mine production.
by empirical analysis of the largest 2,000 a form of “unearned” income, which This data presents a pattern of quasi-
MNCs, which revealed that the share of can be generated when large corporate monopolistic market patterns among a
profits of extractive MNCs rose from 9.3 entities exclude competitors from group of powerful MNCs in the global
percent in 1996 to 13.3 percent in 2015. entering the market for the services or mining industry. This trend has limited
products that they supply. the ownership over the share of rents
Meanwhile, a separate study, which
measured the influence of corporate Monopoly Rents in the Global Mining generated from the global mining industry
power in the global supply chain (GSC), Industry to a small number of powerful and highly
estimated that about 80 percent of global profitable corporations.
trade (in terms of gross exports) is linked A potential entrant into the global mining Political Rents, the Rentier State and
market would have to invest at least
to the international production networks Corporate Rentiers
of transnational corporations. several billion U.S. dollars to launch a While a “significant proportion of
competitive, large-scale mining operation.
The trade, production and ownership of [corporate] rents has... accrued through
the extractive industries have become Large-scale mining, which accounts for monopolies or quasi-monopolies,” as
particularly concentrated among a small 95 percent of global mining production , the UNCTAD study reports , some income
number of exporters, importers and is carried out by private corporations (rents) can also be generated by what is
MNCs. with various ownership structures (from referred to as “’political rents’ derived
publicly traded to state owned) and sizes:
Recent evidence of rising market companies range from 150 or so “senior” from the ability to influence particular
concentration among MNCs within mining companies with over $3 billion in aspects and details of government
certain sectors of the extractive assets to thousands of smaller “junior” policies in ways that disproportionately”
industry, particularly the mining industry , companies. favor corporate entities.
has prompted concerns among some The recent growth in global corporate
economists regarding the links between The data above is largely consistent rent-seeking practices by MNCs is partially
with the findings from a 2018 report
increased market concentration, income facilitated through what is referred to as
inequality, and rent-seeking . carried out by global auditing firm the “rentier state,” which is comprised
PricewaterhouseCoopers, which showed
According to a 2018 study conducted that the capitalization threshold to rank of various public institutions and legal
by the United Nations Conference on among the world’s top 40 largest mining policies, including: cheap exploration
Trade and Development (UNCTAD) rent- corporations is estimated to be at around permits, flexible labor laws, and low
seeking practices by MNCs on the rise in $5.4 billion. tax rates that benefit the interests of
key sectors of the global economy have “rentiers” (corporate investors).
become a major driver of global income The capital-intensive nature of the Tax revenues, specifically from the mining
inequality. industry poses significant barriers for industry, have tremendous potential to
entry into the market, causing a high

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