O Level Notes : Geography - Minerals And Mining - The concept of Cost- Benefit- Analysis

In mining it involves identifying the benefits of mining projects. These benefits are assessed against the costs of the mining project. If the costs are too much compared to the benefits, the mining project may be stopped. Costs of a mining project include financial, social and environmental costs. Financial costs are determined by:

 The depth of mineral seams

If the layers containing mineral ores are deeper, mining tends to be more expensive. This is so because deep mining calls for sophisticated machinery, ventilation and lighting.

 Shaft mining for deep mineral seams is expensive

 Panning is cheaper than shaft mining because minerals are near the surface

The cost of labour

If labour is expensive mining tends to be expensive. In countries such as Zimbabwe where there is high unemployment and more skilled labour, labour is cheap.

Level of infrastructure development

Where infrastructure such as roads and railway lines have already been constructed, mining is cheaper. This means that mining companies do not need to start by incurring the cost of developing infrastructure. 

Social costs are the costs of taking responsibility of the people living near the mining area. In some cases people have to be resettled to have way for mining activities. For example people were resettled from Chiadzwa- to Odzi when diamond companies started operations at Chiadzwa. These costs have to be assessed. Environmental costs involve costs of protecting the environment such as cleaning the environment of the wastes from mining. 

The benefits from mining include profits from mining, raw materials to industries, infrastructure development and creation of employment. If these benefits far outweigh the costs mining is deemed possible and lucrative. If a Cost- Benefit- Analysis shows that the cost are too much and can not be reduced to offer more benefits mining is not lucrative.

Cost- Benefit-Analysis is important in mining because:

• It ensures that mining is done in a profitable way
• It helps to stop unnecessary extraction of minerals
• It ensures that the costs of mining are covered by the benefits from mining
• It enables the making of informed decisions in the mining sector
• It enables the enumeration of costs and benefits as these are quantified
• It enables the evaluation of costs and benefits of a mining project.

NB: the first step in conducting a CBA is to compile a comprehensive list of all costs and benefits associated with an investment project. the final step is to compare the results of the aggregate costs and benefits quantitatively to determine if the benefits outweigh the costs. If so, the rational decision is to go on with the project.

Here is what we discussed in this topic

• Environmental Impact Assessment (EIA) protects the environment from the harmful effects of projects such as mining
• In Zimbabwe, EIA has become compulsory for all major development projects

• EMA is responsible  for  enforcing  protection  of  the  environment  in Zimbabwe

• Sustainable use of mineral resources is done through conserving the resources
• Cost- Benefit- Analysis seeks to identify and assess the costs and benefits of mining to enable informed decision making

• The costs  of  mining  include  environmental,  social  and  financial  or economic costs

Definition of terms used in this topic

Alternative energy sources: these are other options for use as a source of power, for example, rather than using minerals, solar is an alternative

Cost- Benefit- Analysis (CBA): is the process of identifying and assessing the costs and benefits of a project

Environmental Impact Assessment (EIA): this involves procedures to identify, predict and assess potential effects of projects on the environment. Environmental costs: these are the expenses of protecting and cleaning up the environment

Mineral seams: these are layers of rock containing mineral deposits

Recycling: It is the process of converting waste materials into new materials and objects.

Reducing: it is the process of limiting or cutting down the amount of mineral resources used or exploited hence conserving the resources and reducing pollution caused by the resources and their wastes

Reuse: This is the finding of ways of repurposing items that no longer serve their purpose.

Social costs: these are the costs of looking after the communities located around the mining area

Sustainable mineral resource use: it is the concept of wisely using resources to prevent their depletion and environmental degradation so that future generations access them

Waste footprint: it is the total amount of wastes generated