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Is the extractive sector really favorable for the Pan Amazon’s economy?

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The Pan Amazon is a significant source of several key industrial commodities. Global markets are not overly dependent on the region; nonetheless, production from Amazonian mines is not insignificant. Development of mineral resources is a decades-long process and, if the extractive sector were to abandon the region, as proposed by some environmental advocates, the global economy would find other geographies to supply these essential minerals. Oil and gas production is insignificant at the global scale (< 0.1%) and production could be wound down without difficulty. In purely financial terms, the Amazonian minerals sector is minuscule, with a total GDP of ~US$20 billion in a global economy estimated at US$85 trillion in 2020, of which about 3% was attributed to oil and gas (US$2.1 trillion) and 1% to industrial minerals (US$850 billion). The global economy could easily adapt to an Amazon that did not include an extractive sector. The same cannot be said for the Amazonian countries. Royalty income from the mineral sector in Pará, Brazil. The municipality of Parauapebas received the lion’s share of royalties due to the mines at Carajás Serra Norte (iron ore) and Salobo (copper). After 2018, operations at the S11D (iron ore) and Sossego (copper) mines started generating revenues for the municipality of Canaã do Carajás. Data source: CGA (2022). The net revenues from minerals extracted from the Pan Amazon in 2017 were equivalent to about 8% of regional GDP. If all extraction were to stop, the impact would be even greater, however, due to the…This article was originally published on Mongabay

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