The effect of local supply chain on regional economic impacts of mining

Abstract

This paper presents an approach, based on input-output analysis, for identifying critical commodities in a supply chain to guide a local procurement supply chain management strategy aimed at creating shared value and more sustainable outcomes. The Missouri stone mining and quarrying industry is used to illustrate the approach. The work shows that the approach can be used to produce a ranked list of critical commodities, which can then be used to guide decisions to build local capacity to create shared value. For the Missouri stone mining and quarrying industry, there are 89 backward commodities. The proposed method predicts potential change in local supply of $1 million or more for each of 18 of these commodities. In particular, enhanced local procurement of tires; securities, commodity contracts, investments, and related services; and transportation have the highest potential impacts on the Missouri economy. There are 30 commodities which cannot be used to target shared value creation through improved local procurement because there are negligible imports into the Missouri stone mining and quarrying sector or exports out of Missouri.