Yanacocha: An Unsustainable Development Practical Corporation

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Yanacocha: An unsustainable development practical corporation


The economic activity of mining is one of the most important in Peru since it contributes 14.36%, and is located second after the manufacturing that represents the 16.52% within the formation of the Peruvian Gross Domestic Product (Economic Week, 2019), therefore, mining activity is one of the fundamental pillars of the country’s economy. 

Additionally, at international level Peru is among the first producers of gold, silver, copper, lead, zinc and iron in the world, which makes this country an objective for international mining corporations and are also raw materials used by industries by industriesof technology for which it represents a significant figure in exports, taxes and employment generation.

However, mining also causes significant impacts to the environment, which derives from its activity due to the use of polluting substances and excessive water use. Environmental damage occurs when the loss, decrease or degradation of one or more of the environmental components occurs. 

Among them, is the alteration of bodies of water, air, soils, flora, fauna and landscapes, forest deforestation, and the inappropriate disposal or disposal of mineral waste. However, this is not the only negative that produces mining activity, due to the participation of multinational companies in the activity and their main objective to achieve the greatest possible benefit and reduce costs to the maximum. This is why the problems derived from mining activity also add the affectations of the settlers, both socially and in health.


Although, mining is an economic activity, it is its major. In this way, it is possible to assimilate minor production costs by the company and society assumes, ignoring the value and consequences, which are outsourcing.

These costs are classified by the COASE theorem as market failures, it can be said that the models of capitalist markets in which only the maximum profits are sought to the lower costs is necessary to outsource those that we can avoid. It is the result of not having clear the property rights of the goods involved in mining, on the one hand, it is clear that mining has a specific area of influence, that is, where it performs its activity. Therefore, he paid an amount of money to acquire the property right on the land that works, additionally there is also a legal exchange for the services provided to the mining company, among which are the public services provided by the State.

However, establishing property rights on goods such as water, air, the environment or biodiversity of a geographical area is supremely complicated and exhausting without the intervention of the State. The difficulty of defining property rights is usually a fundamental obstacle when finding self-correcting solutions based on the market model with the vision of the corporation as an imperative rule, because the indirect effects of the production or consumption activity can affectTo public goods, which are a special type of externality. 

These assets are limited to two principles: the impossibility of exclusion (who produces or maintains a public good, even for the basis, cannot prevent others from benefiting from it) and non -rivalry (the consumption that one does not reduce the opportunityof consumption of others). If the private benefits are small in relation to the social benefit, but the deprived costs of supplying the public good are large, it is possible that no one will supply it. The importance of the public good problem has long been recognized in the field of public finances. 

The problem of the public good is especially notable in the field of environmental economy, which deals to a large extent of the analysis and solution of issues related to externalities. Pure air, drinking water, biodiversity and the existence of sustainable fish in high seas are goods that are mostly limited to the principles of impossibility of exclusion and non -rivalry. 

They are free goods, product of nature and available to all. They are not subject to any well -defined property right. Therefore, neither households nor companies attribute enough value, and it is not feasible to reach an efficient market result through negotiation. In other words, environmental issues usually face a collective action problem.

Therefore, for corporations it is supremely easy. Although, property rights on the environment are established in international treaties and protected by non -governmental organizations, each country is the right to exercise their protection effectively by legislation or, on the contrary, allow multinationalstake advantage of legal gaps or not adopting international regulation for natural resources care.


In Peru, the main extractive activity is mining. However, to know its impact, beyond its contribution on the aggregate figures of the economy. Although extractive activity brings relative economic growth for a country, it is also necessary. 

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