Long-term Adverse Economic Effects of Mining on Communities

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1 Long-term Adverse Economic Effects of Mining on Communities Prepared for Citizens Against Phosphate Mining in Union and Bradford Counties and Our Santa Fe River by Richard Weisskoff, Ph.D. April 13, 2016

2 Introduction On March 17, 2016, I provided a report titled, Economic Effects of Mining on Florida Communities. Included in that that report was a summary of my education, expertise and experience as an expert on economic impacts of mining in Florida. Also included in that report was a discussion and examples of jobs created and destroyed by mining in Florida. This supplemental report includes a discussion and examples of long-term adverse economic effects of mining on communities. Long-term Adverse Economic Effects of Mining in Communities Including Growth Stunting Inflated expectations accompany proposed mining in communities. Owners of lands zoned for agriculture often are paid high prices to sell or lease their property for mining, giving the impression that the owners and their families are financially secure for the rest of their lives. Unfortunately, the boom-and-bust cycle begins with the initiation of the mining and the processing operations. The sudden growth is not sustainable and the community is converted into a moonscape that continues for decades. The book, Lost Landscapes and Failed Economies, (Power, 1996) analyzes this process for the western mountain states. The following two books by Carter Brown, Jr. (2001 and 2005, respectively) address the Florida phosphate industry and its historical impact on wealth and local environment of the Bartow area of Polk County: (1) In the Midst of All that Makes Life Worth Living, Polk County, Florida, to 1940 (particularly Chapter 9) and (2) and None Can Have Richer Memories, Polk County, Florida, (particularly pages 242 and 266). The author is a native of Ft. Meade, in Polk County, Florida. Desoto, Polk and Hardee Counties were the locations of early large-scale phosphate mining in the bone valley region of central Florida. Evidence of the economic impacts of these mines on the counties is seen in the maps and population profiles included in the figures and table below. The first figure is a 1990 map of southern Florida, created by the Florida Institute of Phosphate Research, that shows the areas: mined for phosphate prior to July 1, 1975 (black); mined after July 1, 1975 (dark green); unmined with an approved state conceptual plan (blue); and not yet permitted to be mined (yellow). This map clearly shows that most of southwest Polk County has been mined. The mining had stopped abruptly at the southern boundary or unofficial frontier of Hardee County; however, Hardee County has many yellow-colored areas, indicating land with phosphate resources that had not been permitted for mining in Now that Polk County is mined out, new phosphate mining has been initiated in Hardee and Manatee Counties. Even Desoto County, to the south of Hardee County, has approved a mining overlay to its land use plan, thereby opening up the land to be permitted for mining. 2

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4 Figure 2, below, is a more detailed map of Hardee County, prepared by the Hardee County Planning and Zoning Department in The blue areas indicate the areas already mined (22,900 acres) and the green areas were unmined areas at the time the map was created (84,950 acres). Figure 2. Map of phosphate mining prepared by the Hardee County Planning and Zoning Department in The areas that already have been mined and are permitted to be mined in Hardee County form a hang-man s noose around the northern-most town of Bowling Green, which already has the appearance of a museum-like town surrounded by sterile, reclaimed mined lands. Further to the south and west of Wauchula, the county seat, around the village of Ona, the sound of the miners draglines already can be heard. In a few years, the eastern approaches to Bowling Green and Wauchula also will fall to the mines. This mining potentially compromises the water supply for the human population, as well as the livestock (Hardee County has some 70,000 cattle and calves) and the world famous Center for Great Apes, a sanctuary located near the eastern mining lands. 4

5 The growth-stunting impacts of the mines are profiled in Table 1 for Polk and Hardee Counties. The following three Polk County towns are located in the heart of the mining country: Bartow, Ft. Meade, and Mulberry (rows 2 4). The number of people recorded at each decade s census is shown in columns 1 5, but the percentage change for each decade (columns 6 9) shows the increase or decline in growth for the period. Therefore, the purple-shaded numbers in columns 6 9 of rows 1 3 exemplify the boom-bust, up and down cycle of the phosphate towns. For example, during the entire 40-year period between 1970 and 2010 (column 10), Bartow grew 34% (row 2); Ft. Meade grew by 29% (row 3); and Mulberry grew by 41% (row 4), but the entire county grew by 165% (row 1, yellow-shaded). The 13 other municipalities in Polk County grew by 178% (row 1, yellow-shaded)! The growth of these three phosphate mining towns, especially Bartow (the Polk County seat) was stunted, rather than enhanced, by mining. Mining may have generated profit for the mining companies and some of the landowners, but few other people prospered or derived a sustainable livelihood from mining. This contrasts with the rest of the county that relied upon citrus, cattle, and vegetables in the farm sector and on tourism in its diverse forms. See also the two Brown Jr. (2001 and 2005) books referenced above. This same stunting process is beginning in Hardee County, as illustrated in Table 1, rows 7 9 and Figures 1 and 2. The population for Bowling Green, the smallest and northern-most municipality in Hardee County, already is encircled by mines on the north and west. Bowling Green experienced a roller-coaster growth pattern or boom and bust: growing first by 70% from 1970 to 1980, then declined by 21% from 1980 to 1990, then grew by 38% in the next decade, and then slowed to 3% growth from 2000 to 2010! The two other Hardee County towns (Wauchula and Zolfo Springs, row 9) demonstrate swings in population to a lesser degree. There is a boom-and-bust cycle in farming as well, and this is illustrated by the ups-and-downs in the overall Hardee County growth (line 7). There is, however, a big difference between the farming cycle and the mining cycle: 5

6 (1) farming cycles distribute earnings over a wider base and a wider range of people than does mining; (2) farming has more extensive economic linkages to other sectors of society compared to the enclave-like mining activity; and (3) sustainable farming allows the land to yield in perpetuity. Phosphate mining technology results in wasted land and contaminated water, and, during the mining period, actually fewer local jobs than before the mining started. Finally, at the end of the process, there may be no jobs for anybody once the land is mined out and the processing plants have moved abroad. No Need for Additional Phosphate Mining in Florida Finally, there is a basic, underlying economic question: Is there a need for additional phosphate mining in Florida? There is no shortage of material for phosphate mining in the world, now or in the near future. Prices for phosphates are at 4-5 year lows due to increased supply over demand. The world probably will produce over 200 million tons of phosphate concentrate and direct shipping ore (DSO) combined in The low prices discourage new suppliers of production from entering the market, such as mines in higher-cost regions, like Australia, but low prices encourage wider use of fertilizers, which the existing mines easily can supply. Mosaic, the major US producer and owner of the Polk and Hardee mines, is 18 months away from completing its new flag-ship overseas joint-venture in Saudi Arabia. In contrast to Peru, this Saudi-Mosaic venture is fully integrated upstream through to diammonium phosphate (DAP), monoammonium phosphate (MAP), and some specialty phosphates. Jointly owned by Mosaic, this arrangement permits Mosaic more control over production than it has with Morocco, the world s major exporter. Mosaic s Saudi Arabian Mine will undercut any real economic need for further new or high cost production in the US. For example, Syria once exported 10% of total world trade in phosphates, but Syria s mines in Homs have been over-run by the Islamic State. This sizeable breach in supply has been made up by increased production from Egypt, Peru and Senegal, which, together with Morocco, keep the world awash in phosphates and its derivatives. References Carter Brown, Jr. (2001). In the Midst of All that Makes Life Worth Living, Polk County, Florida, to 1940, Polk County Historical Association. Tallahassee, Fl.: Sentry Press. Carter Brown, Jr. (2005). None Can Have Richer Memories, Polk County, Florida, Polk County Historical Association. Tampa, Fl.: University of Tampa Press. Thomas M. Power (1996). Lost Landscapes and Failed Economies, Washington, DC: Island Press. 6