External Factors Affecting Mining

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Outside pressures on the mining industry affect every American's cost of living.
Outside pressures on the mining industry affect every American's cost of living. (Image: NA/AbleStock.com/Getty Images)

Because mining affects every major industry -- from manufacturing to transportation -- whatever influences mining, affects the lives and pocketbook of every American. Environmental regulations, ideological swings in government and market fluctuations are just a few of the outside pressures that affect mining and, in turn, the health of the nation’s economy.

Environmental Regulation

The Comprehensive Environmental Response, Compensation and Liability Act; the Clean Water Act and the Resource Conservation and Recovery Act are federal regulations requiring mining companies to act as responsible stewards of the environment. These laws mandate that mining companies limit their damage to the environment by reporting and cleaning up release of hazardous substances into the environment and employing environmental safeguards, including the proper storage and disposal of hazardous waste.

Politics

Politics

A report on the mining safety program of the National Institute for Occupational Health and Safety explains how a political shift at the federal level can directly affect the research, enactment and enforcement of safety regulations in mining industries. For example, during the administration of Ronald Reagan, a number of research projects by the agency were either terminated or stopped before they began because the president’s science adviser believed applied research -- including mine safety research -- was beyond the purview of public agencies and should be left to the private sector.

Transportation Costs

A University of Kentucky report explains how high transportation expense, especially when combined with low profit margins on mining product, can have a dramatic effect on general mining operations. In 1996, the high cost of hauling coal used for electricity production by truck at a time when the average price for such coal was low, forced Kentucky mining companies to boost production while simultaneously cutting mining and support jobs across the board. Some companies attempted to mitigate the high cost of transportation by turning to higher profit, lower volume markets in the metals and chemical industries.

Oversight and Market Fluctuation

A May 2011 press release from Mines Management, Inc., demonstrates the impact of government oversight and commodity prices on mining operations. In the release, the company tells investors work on its Montanore silver-copper project had been stopped because of delays in approval of its environmental impact survey and development operations at the site could be “deferred” if changes in commodity prices make the operation too expensive.

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