Diversification as a Response to Decline in the Mining Industry: Arsenic and South-Western Metal Production 1850–1914

Abstract

Joint supply functions are not uncommon but nowhere are they more prevalent than in the mining industry. Assessment of the importance of marketable by-products is made more difficult by the lack of detailed information on costs. This study shows how data on output and prices may be used to provide evidence of the qualitative and quantitative importance of arsenic—the most important by-product of S.W. mines—to the development and performance of the S.W. mining industry. Detailed annual returns on tin and copper mines are used to chart the development of individual mines. The circumstantial evidence for the importance of arsenic is strong but the use of highly disaggregated data reveals that arsenic production was irrelevant to the vast majority of tin and copper producers although for a few it may have aided continuity of production for a very short period. The apparent misconceptions are shown to have arisen from the development of one major arsenic producer. Statistical evidence is produced in the form of estimated supply functions. The functions are well defined and reveal that neither the price of nor production levels of arsenic had any significant impact on tin and copper production—a result in marked contrast to the casual empiricism of industrial historians.