Taxation

Mining’s Economic Contributions

In a report prepared by PriceWaterhouseCoopers (PwC) for the National Mining Association in October of 2010 based on 2008 data, entitled Economic Contribution of U.S. Mining, one finds a paragraph in the Executive Summary that clearly imparts on the reader the importance of mining in the United States.

“Mining provides jobs, pays salaries, and generates value in all 50 states.  The economic contribution of mining is greater than these direct effects.  Mining operators purchase inputs from other parts of the economy, and these suppliers in turn purchase goods from other companies.  Employees spend wages at local businesses, whose owners in turn spend the proceeds on new supplies and other goods.  Governments at the federal, state, and local levels collect taxes on this activity.  From a broader perspective, the products produced by U.S. mines provide the raw materials required by the rest of the economy.  The ability of the U.S. economy to compete internationally depends on the availability of such inputs.”

According to the PwC report, the five states in which mining accounts for the largest share of total state economic activity are Wyoming (14 percent), West Virginia (11.6 percent), Montana (7.0 percent), Nevada (5.6 percent), and Kentucky (4.6 percent).

This report defines U.S. mining to include activities associated with the mining of coal, metal ores and non-metallic minerals and does not include the economic or employee benefits of coal and uranium-based electricity generation or the manufacturing and other end-users of metal and non-metal minerals.
The total direct, indirect, and induced contributions of mining in Montana is impressive.  For example:

  • Employment Number and Percent of State Total – 23,970 or 3.8%
  • Labor Income in Millions of Dollars and Percent of State Total – $1,305 or 5.6%
  • Contribution to GDP in Millions of Dollars and Percent of State Total – $2720 or 7.0%
  • Taxes Paid in Millions of Dollars – $646

Non-metallic mineral mining, metal ore mining, and support activities comprised, respectively, 30 percent, 27 percent, and 7 percent of mining output.

Tax Contribution by Segment for Montana (Millions of Dollars)

Overall Tax Contribution

Coal Mining

Metal Mining

Non-Metallic Mining

$131

$365

$150

State and Local Tax Contribution

Coal Mining

Metal Mining

Non-Metallic Mining

$62

$175

$61

 

Mining in Montana, 2008

Measure

Coal Mining

Metal Mining

Non-Metallic Mining

All Mining

Contribution to GPD ($millions)

  Direct

$309

$1,186

$292

$1,787

  Indirect and Induced

$221

$506

$208

$934

    Total

$530

$1,692

$499

$2,720

Employment

  Direct

    Mine Workers

910

2,540

1,140

4,590

    Support Activities

90

120

60

270

    Transportation

730

2,980

1,680

5,390

  Total Direct

1,730

5,640

2,880

10,250

    Indirect and Induced

3,060

7,200

3,400

13,720

  Total

4,790

12,840

6,340

23,970

Labor Income ($millions)

  Direct

$150

$455

$181

$785

    Indirect and Induced

$123

$288

$110

$521

  Total

$273

$743

$289

$1,305

Average State Labor Income

  Mining Direct

$86,458

$80,660

$62,675

$76,549

  State Average, All Industries

$36,840

$36,840

$36,840

$36,840

Tax Contributions ($millions)

  Overall

$131

$365

$150

$646

  State and Local Only

$62

$175

$61

$297