Wednesday, February 26, 2014

Mining, an industry more about public relationships than minerals

Mining is an industry dedicated to the extraction of natural resources and here is where everything starts. Mining companies usually have to pay royalties to governments which are some kind of taxes that they pay based on their profit and the amount of minerals extracted from the ground. Mining companies usually face environmental regulation enforced by governments, this is done so the land won't be poisoned or polluted.  Mining companies usually spend a great deal of money and time in accomplishing all these regulations. Governments play a huge role in the amount of mining investors, because of the royalties; mining companies will decide whether to invest in a certain place or not based on the royalties that they will have to pay. Also, the ownership of the mineral which is determined by the governments plays a huge role in whether mining companies will invest or not. Also, mining companies tend to stay away from unstable governments because the government could take over the mining place and it would be a huge lost for the company. In other words, mining companies will only invest where the government is friendly a reasonable. Demonstrations are another factor that affects the mining companies because usually people living in the surrounding areas of the mining camps will demonstrate to get some good or service from the mining company. For example, a mining company comes to this place and they do their studies on the land and conclude that it is rich in mineral recourses, then they have to apply for permits from the government to extra the mineral, then they have to invest huge amount of money in environmental regulations, make happy the people in the surrounding areas by offering services like roads, water system, jobs, etc. And finally they have to pay royalties to the government. In other words, the mining companies have to give a ton benefits to people and entities that won't help them more profits. It looks unfair for mining companies but they help a lot of people and still make profit. In other words they work more in public relations than in extracting minerals because they usually focus on pleasing everybody that can harm their business directly or indirectly and after they have accomplished that goal they can start to extract those precious metals.

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