The social and economic impacts of the extractive industry in the global south have been well documented for decades. Latin American nations became more attractive for mining companies to extract mineral wealth after the IMF-mandated reforms of the 1980s. Parts of Africa have a long history with mining, impacting the continent socially, economically, and environmentally.
One of the best examples of these effects is Zambia. Immense natural wealth, combined with the fact that it has been independent for 50 years, is democratic, stable, and has never been at war, would suggest it would be one of the richest countries in the continent. This is not the case, however, and strong evidence points to the impact of extractive companies and their operations in the country.
Though Zambia is the 7th largest producer of copper, it is 164th on the global human development index; 80% of foreign exchange earnings comes from mining; 60.5% of the population lives below the poverty line.
At the public conference on Eldorado Gold in Thessaloniki, ActionAid, an international NGΟ whose primary aim is to fight poverty and injustice worldwide, presented evidence of plundering by mining companies, made easier by their privatization in the 1990s. A decline in copper prices resulted in a reduction in the mining sector’s share of Zambia’s GDP since the 1970s.
Privatization was meant to turn the Zambian economy, which was in world-record decline, around by making mining more profitable. What resulted, however, was copper mining activity in Zambia being conducted entirely by foreign companies since no Zambian companies could afford to buy a copper mine.
Tax planning methods similar to ones used by Eldorado Gold to dodge taxes in Greece has resulted in tax base erosion in Zambia so severe that public health, education, and infrastructure is lacking development. This is because it has driven tax contribution by multinational corporations engaging in mining activities in Zambia to be driven down to near 0%. This results in Zambian workers, small business owners, and indeed even Zambian miners themselves paying higher taxes than mining companies do even if they make as little 750 euros per year.