Impact of Mining on Africa's Development

35 min

Let's begin

When Botswana became independent in 1966 it was one of the poorest countries in Africa. A year later, diamonds were found at Orapa. Botswana went into partnership with the mining company De Beers, saved and invested the income, and became an upper-middle-income country. Yet in the early 2020s, as cheaper diamonds grown in laboratories took away buyers, the fall in diamond sales hit government income hard. Botswana's story shows both sides of mining: it can build a nation, and it can leave a nation exposed. How does mining affect Africa's development?

Definition

Development: improvement in people's lives, including income, health, education and choices. Multiplier effect: the way money spent on one activity, such as a new mine, creates further jobs and income in other activities. Resource curse: the situation in which a country rich in minerals grows more slowly or suffers more conflict than countries with fewer resources, often because it depends on one export and its income is badly managed. Royalty: a payment made to the government for each unit of a mineral extracted.

Positive impacts

Impact	How it helps development	Example
Foreign exchange	Mineral exports pay for imports of machines, fuel and medicines	Diamonds from Botswana; oil from Nigeria and Angola; copper from Zambia
Government revenue	Taxes, royalties and shares pay for schools, hospitals and roads	Diamonds provide about half of Botswana's government revenue
Employment	Jobs in mines and in transport, processing and services	Mining towns of the Copperbelt
Infrastructure	Railways, roads, power stations and water supplies built for mines serve everyone	The TAZARA and Benguela railways; Kariba power for the Copperbelt
Growth of towns	Mining towns become centres of trade and services	Johannesburg (gold), Kitwe (copper), Lubumbashi (copper)
Industrial development	Minerals supply smelters, refineries, steel and cement works	Coal for power and industry in South Africa
Skills and technology	Workers learn engineering, geology and machine skills	Training schools run by mining companies

Negative impacts

Dependence on one export: when a single mineral earns most export income, a fall in its world price brings the whole economy down, as copper did to Zambia in the 1970s and 1980s and as falling diamond sales did to Botswana in the 2020s.
Neglect of other sectors: farming and manufacturing may be ignored while mining booms.
Profits leave the country: foreign companies send profits home, and raw ores are exported for processing elsewhere.
Conflict and corruption: control of mineral wealth has fuelled wars, as with diamonds in Sierra Leone, and money can be stolen if it is not managed openly.
Environmental damage and health costs (Lesson 3), which fall most heavily on local people.
Few jobs for the money earned: modern mines use machines, so they employ fewer people than their earnings suggest.
Exhaustion: when the ore runs out, mining towns decline unless other activities have been built up.

Figure 4 shows how the same mine can lead either way. Good management, saving and investment in other sectors produce the multiplier effect; dependence and mismanagement produce the resource curse.

Mining and Rwanda's development

Mining is one of Rwanda's largest sources of export income. RMB reported that mineral exports earned over 1.1 billion US dollars in 2023, up 43% from 2022, and linked the growth to value addition, more professional operations and mechanisation. These earnings help pay for imports and for the country's development. The challenges are the ones this unit has studied: prices that rise and fall on world markets, the need to keep small mines safe and clean, and the need to prove where each mineral comes from so that buyers trust it.

Worked example

Worked example 1: the multiplier effect (illustrative figures). A new mine employs 800 people. Studies of the area suggest that every mining job supports 2.5 more jobs in transport, shops and services. How many jobs does the mine create in total?

Extra jobs = 800 × 2.5 = 2,000.
Total = 800 + 2,000 = 2,800 jobs.
Conclusion: the mine's effect on the region is much larger than its own payroll.

Worked example

Worked example 2: a price shock (illustrative figures). A country exports 800,000 t of copper a year at 9,000 US dollars per tonne. The price falls by 30%. How much export income does it lose?

Income before = 800,000 × 9,000 = 7,200 million US dollars.
Loss = 30% × 7,200 = 2,160 million US dollars.
Conclusion: a country that depends on one mineral can lose a large part of its income in a single year without producing any less.

Warning

An "evaluate" answer needs a judgement. Listing positive and negative impacts is only half the answer. Finish by saying which outweighs the other and under what conditions, for example: "Mining has helped Botswana more than it has helped Sierra Leone, because Botswana's income was managed openly and saved."

Tip

Compare two named countries in mining essays: Botswana (diamonds, stable partnership, savings, but over-dependent) and a contrasting case such as Sierra Leone (conflict diamonds) or Zambia (copper price shocks).

CrashCourse Geography: mineral extraction and how it shapes places, with a focus on the Democratic Republic of the Congo. Note who benefits from the minerals and who bears the costs.

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Practice

Define the multiplier effect and the resource curse.
Give five positive impacts of mining on Africa's development, with an example of each.
Explain how a fall in the world copper price affects a country like Zambia.
Use Figure 4 to explain how the same mine can lead to growth in one country and collapse in another.
Why do modern mines often create fewer jobs than people expect?
A mine employs 1,200 people, and each mining job supports 1.5 other jobs. Calculate the total number of jobs.
Rwanda's mineral exports rose from 772 million US dollars in 2022 to about 1,100 million in 2023 (RMB). By how much did they rise?
"Botswana shows that minerals are a blessing, not a curse." Evaluate this statement.

Show answersHide answers

Multiplier effect: money spent on one activity creates further jobs and income in others. Resource curse: a mineral-rich country grows more slowly or suffers more conflict, often because it depends on one export and manages its income badly.
Any five: foreign exchange (Botswana diamonds); government revenue (about half of Botswana's); jobs (Copperbelt); infrastructure (TAZARA, Kariba power); towns (Johannesburg, Kitwe); industry (coal-fired power in South Africa); skills.
Export earnings and government revenue fall, mines cut jobs, the currency weakens and imports cost more, and spending on services must be cut.
Where income is saved and invested in other sectors, jobs and services spread (multiplier effect); where the country depends on that one mineral and neglects other sectors, a price fall makes income, jobs and taxes collapse (resource curse).
They use large machines and automated equipment, so they need fewer, more skilled workers.
Extra jobs = 1,200 × 1.5 = 1,800; total = 1,200 + 1,800 = 3,000.
1,100 − 772 = 328 million US dollars.
For: diamonds, managed through the Debswana partnership and saved, turned one of Africa's poorest countries into an upper-middle-income one. Against: Botswana depends heavily on diamonds, which provide about half of government revenue, and falling sales in the 2020s hurt it; mines employ few people. Judgement: a blessing so far because of good management, but a risk unless the economy diversifies.

1Positive impacts

2Negative impacts

3Mining and Rwanda's development

Positive impacts

Negative impacts

Mining and Rwanda's development