Mining Commitment and Climate Vulnerability: Evidence from Rainfall Shocks in Guinea

This paper studies whether large mining commitments can reshape macroeconomic exposure to climate shocks before extraction begins. Focusing on Guinea—a highly rainfall-dependent economy—and the Simandou iron ore project, we test whether the sensitivity of growth to rainfall variability changes after a discrete commitment regime associated with major legal and contractual milestones. Using annual data and interaction specifications with Newey–West HAC inference, we find a pronounced regime shift: rainfall shocks are not precisely associated with GDP growth in the pre-commitment period, but become economically large and statistically meaningful after commitment. In the preferred specification with macro controls, a one–standard-deviation rainfall shock reduces real GDP growth by about 0.54 percentage points in the post-commitment regime, implying that rainfall variability explains a nontrivial share of observed growth volatility. Sectoral results indicate that amplification is not cleanly concentrated in agricultural growth; instead, post-commitment rainfall shocks are associated with a positive and significant response in services, consistent with altered co-movement and demand spillovers under changing sectoral composition. Complementary dynamic diagnostics and counterfactual simulations reinforce the timing and magnitude of this amplification. Overall, the findings suggest that extractive commitment can endogenously increase climate vulnerability by reshaping economic structure and shock propagation—even in the absence of mining production or resource revenues—highlighting the importance of aligning extractive planning with climate resilience and agricultural buffering capacity during pre-production phases.