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Gemstone mining as a development cluster: A study of Brazil's emerald mines

  • Puppim de Oliveira, Jose Antonio
  • Ali, Saleem H.
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    For many centuries, emeralds have bejeweled the rich and famous all over the world. Emeralds have also made many millionaires overnight, sometimes by chance, as in some of the cases reported in this study. On the other hand, even though emerald mining has brought some economic benefits, many of these have remained at the top of the production chain. In many cases mining activities have caused a number of negative social and environmental impacts locally. Working conditions in small mines are very poor in general: with bad ventilation, high temperatures, long working hours, lack of safety, informal working contracts and no health or life insurance. Environmental impacts can be significant, such as widespread deforestation, erosion of abandoned mines, and soil and water pollution in streams. The economic and social public benefits can be minimal. Even when taxes on gem mining are relatively low, much of the mining local activity is informal and the high value-added formal activities take place outside the mining regions. This study aims to understand the dynamics of emerald mining and its impact on local development using the concept of clusters. The research analyzes three case studies in Brazil: Campos Verdes/Santa Terezinha (Goias state), Nova Era/Itabira (Minas Gerais state) and Carnaiba/Campo Formoso (Bahia state). Emerald mining regions attract many migrants, increasing the demand for public services (infrastructure, health, education, etc.), but local governments are unable to provide for them because the activity produces little tax revenue. In the end, there is a growing mismatch between demand and supply of public services, leading to a series of social and environmental problems. However, working with the concept of cluster can help to shed light on policies to improve the local benefits of gem mining, by organizing the miners and their supporting organizations to allow investments that bring long term benefits locally.

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    Article provided by Elsevier in its journal Resources Policy.

    Volume (Year): 36 (2011)
    Issue (Month): 2 (June)
    Pages: 132-141

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    Handle: RePEc:eee:jrpoli:v:36:y:2011:i:2:p:132-141
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    1. Hilson, Gavin, 2009. "Small-scale mining, poverty and economic development in sub-Saharan Africa: An overview," Resources Policy, Elsevier, vol. 34(1-2), pages 1-5.
    2. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
    3. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
    4. Machado, Iran F. & de M. Figueiroa, Silvia F., 2001. "500 years of mining in Brazil: a brief review," Resources Policy, Elsevier, vol. 27(1), pages 9-24, March.
    5. Schmitz, Hubert & Nadvi, Khalid, 1999. "Clustering and Industrialization: Introduction," World Development, Elsevier, vol. 27(9), pages 1503-1514, September.
    6. Schmitz, Hubert, 1995. "Small shoemakers and fordist giants: Tale of a supercluster," World Development, Elsevier, vol. 23(1), pages 9-28, January.
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