The Impact of a Strong Local Supply Chain on Regional Economic Impacts of Mining

Abstract

While mines generally focus on achieving operational efficiency, creating shared value for all stakeholders is also a management goal. This includes taking a holistic view of their supply chains and increasing local participation. This paper examines the role of supply chain management in mine management; in particular the effect of a strong local supply chain on regional economic impacts. Using input-output analysis, the impact of a local supply chain on a mining sector's regional economic impact is examined by increasing local sourcing (increasing local purchase percentage - LPP) for 10 key commodities. An approach, based on multipliers and excess local capacity is used to identify key commodities. The impacts examined are sales, employment, labor income, and value added. The work is illustrated with stone mining and quarrying in Missouri. Ten percent increases in LPP of the key commodities, in this example, result in $4.1 million additional impact on the Missouri economy. This work can provide insight on how to better create shared value for all stakeholders.

Meeting Name

SME Annual Conference and Expo and CMA 117th National Western Mining Conference -- Mining: Navigating the Global Waters (2015: Feb. 15-18, Denver, CO)

Department(s)

Mining Engineering

Second Department

Engineering Management and Systems Engineering

Keywords and Phrases

Economic Analysis; Regional Planning; Supply Chain Management; Input Output Analysis; Management Goals; Mine Management; Mining And Quarrying; Mining Sector; Operational Efficiencies; Regional Economic; Shared Values; Economic And Social Effects

International Standard Book Number (ISBN)

978-1510801240

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2015 Society for Mining, Metallurgy & Exploration, All rights reserved.

Publication Date

01 Feb 2015

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