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Mineral Wealth: What it is

  • Rögnvaldur Hannesson

Abstract

Often, the extraction of non-renewable resources is extremely profitable. Diamonds and oil are prime examples. Revenues from diamonds are believed to be the main source of income for the war machine of Unita, a rebel movement fighting the government of Angola. Diamonds are also the main factor behind the economic growth in Botswana, which for the last two decades has had growth rates comparable to the Tiger economies of Southeast Asia.22 The profit per barrel of oil varies greatly from place to place, due to differences in costs. The cost of production probably is about two to five US dollars per barrel in Saudi Arabia, but in the North Sea it can be twice as high or more. The price of oil has for the most part been well above that but volatile; over the two-year period mid-1997 to mid-1999 the price of oil fell from about 20 US dollars per barrel to a low point of about 10 dollars at the end of 1998, and rose again to about 22 dollars just half a year later. In 2000 it periodically went beyond 30 dollars.

Keywords

Real Term Resource Rent Mineral Wealth Differential Rent Natural Resource Industry 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Rögnvaldur Hannesson
    • 1
  1. 1.The Norwegian School of Economics and Business AdministrationNorway

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