The Local Economic Impact of Mineral Mining in Africa: Evidence from Four Decades of Satellite Imagery

This paper assembles large archives of satellite imagery to provide novel insights on how mine openings and closings impact the development of local communities in Africa. We collect 30m-resolution Landsat images between 1984 and 2019 from a 40km radius around 1,658 mineral deposits, covering 12% of the African landmass. Using state-of-the-art techniques in computer vision, we translate these images into economically meaningful indicators, including material wealth predictions as well as urban and agricultural land use. We then use stacked event studies and difference-in-difference models to estimate the local impact of mine openings and closings on these indicators. Our findings demonstrate that mine openings increase wealth and boost local urban growth and agricultural activities in the surrounding area. Furthermore, democratic institutions are a decisive factor for making mining a success for local communities. However, our results show that the fast growth in mining areas is only temporary. After the mines close, former mining areas cannot maintain elevated growth rates and revert to the same pace of development as areas without mines.