MINING A MIRAGE?

The report assesses the impact of mining automation on the shared-value paradigm, which relies on local employment and procurement to provide socioeconomic benefits to host communities. Using case studies from a high-income OECD country and a lower-middle-income country, the authors model workforce reductions of 30%, 50%, and 70%. They find that while absolute GDP impacts may be small at a national level, the loss of wages, salaries, and local procurement can significantly reduce the total value a mine contributes to its host economy. The report concludes that developing countries may be more vulnerable due to over-dependence on extractives and lower technical capacity to adapt. It suggests shifting the shared-value focus toward downstream beneficiation, horizontal industry linkages, knowledge transfer, and revised fiscal regimes, such as resource rent taxes or increased government ownership.

• Automation in mining is expected to significantly reduce operational jobs in drilling, blasting, and driving, which typically make up over 70 per cent of mine employment.
• The report identifies ten key technologies driving automation, including autonomous haul trucks, long-distance haul trains, tele-remote ship-loaders, and programmable logic controllers (PLCs), the latter being described as the most crucial for removing semi-skilled onsite jobs.
• In a high-income OECD case study, automation-driven workforce reductions of 30% to 70% could lead to a decrease in the mine's contribution to GDP ranging from 8.5% to 19.6%.
• In a lower-middle-income country case study, the reduction in the mine's contribution to the national economy under the same scenarios ranges from 6.2% to 14.1%, with national GDP impacts ranging from just below 2% to just below 4%.
• Payroll reductions are the primary driver of GDP loss; in the high-income OECD case, they account for 86% of the impact, and in the lower-middle-income case, they account for 92%.
• Government revenue from personal income taxes is highly sensitive to automation; the high-income OECD case saw a projected revenue drop of 25% to 58%, compared to 6% to 15% in the lower-middle-income case.
• Developing countries may suffer more severe socioeconomic impacts than developed countries because they are often over-dependent on the extractives sector and lack the financial and technical capacity to adapt to technological shifts.
• To maintain shared value, the report suggests exploring alternative linkages: downstream beneficiation (refining/smelting), horizontal linkages (non-mining industries), knowledge transfer, and spatial infrastructure benefits.
• The authors recommend revising fiscal regimes to capture automation-driven profits, suggesting the use of progressive resource rent taxes or increasing government equity and ownership structures.
• There is a critical lack of standardized procurement data in the mining industry, which hinders the ability of companies and governments to manage and maximize local economic impacts.

APA

Cosbey, A., Mann, H., Maennling, N., Toledano, P., Geipel, J., & Brauch, M. D. (2016). MINING A MIRAGE? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/mining-a-mirage.pdf

Chicago

Cosbey, Aaron, Howard Mann, Nicolas Maennling, Perrine Toledano, Jeff Geipel, and Martin Dietrich Brauch. MINING A MIRAGE? International Institute for Sustainable Development, 2016. https://www.iisd.org/system/files/publications/mining-a-mirage.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |last2=Mann |first2=Howard |last3=Maennling |first3=Nicolas |last4=Toledano |first4=Perrine |last5=Geipel |first5=Jeff |last6=Brauch |first6=Martin Dietrich |title=MINING A MIRAGE? |publisher=International Institute for Sustainable Development |date=2016 |url=https://www.iisd.org/system/files/publications/mining-a-mirage.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2016mining, author = {Cosbey, Aaron and Mann, Howard and Maennling, Nicolas and Toledano, Perrine and Geipel, Jeff and Brauch, Martin Dietrich}, title = {{MINING A MIRAGE?}}, institution = {International Institute for Sustainable Development}, year = {2016}, url = {https://www.iisd.org/system/files/publications/mining-a-mirage.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }