When attempting to understand potential regional or community socio-economic changes that resource-extraction industries may produce, it is important to analyse the channels that promote these changes. In this study, we propose a conceptual framework to better understand how socio-economic effects are likely to emerge in regions impacted by mining. The framework considers three levels of hierarchical effects (Measham, Fleming and Schandl, 2016).
In the first level, the resource-extraction industry causes four direct initial impacts on nearby communities: labour demand shock (mining employment generation), income generation (compensation to landowners and higher wages), environmental consequences and land tenure/Aboriginal issues and an increase in local tax revenues.
The second level is shaped by the subsequent population increase (given by immigration of permanent or temporary residents) produced by the new levels of employment and income that resource windfalls can generate in resource-extraction regions. These increases in employment, income and population become the source for a rise in the demand for local (and non-local) goods and services.
Finally, the third level is given by boomtown-like and other socio-economic effects generated from the initial effects.
Measham, T G and Fleming, D A, 2016. A conceptual framework
to understand the local community/social impacts of mining, in Proceedings
Life-of-Mine 2016 Conference , pp 188–190 (The Australasian Institute of Mining and Metallurgy: Melbourne).