Costs and Benefits of Coral Mining

Costs and Benefits of Coral Mining

Primary Country: Sri Lanka
Ecosystem: coral reef
Sample Value Estimates:
(a) US$ 27,000 km^-2 reef was net profit to coral miners per year (b) US$ 192,000-430,000 net profit to coral miners per year in Sri Lanka. (c) US$ -33,000 NPV of 1 km^-2 was estimated societal costs of coral mining in a low cost scenario for Lombok (d) US$ -762,000 NPV of 1 km^-2 was estimated societal costs of coral mining in a high cost scenario for Lombok (e) range was between no costs to a NPV of US$ -6,610,000 was estimated societal costs of for Sri Lanka For Lombok, the low cost scenario was one in which there is limited tourism potentional and little coastal construction and the high scenario is one in which there is a high tourism potential and considerable coastal infrastructure.
Methodology: financial analysis of annual net profits and economic analysis in terms of associated losses to typical reef functions to arrive at a cost-benefit analysis of coral mining
Region: Asia

Publication information

Öhman, M.C. Cesar, H.S.J. “Costs and Benefits of Coral Mining” In: H.S.J. Cesar (ed). Collected Essays on the Economics of Coral Reefs. CORDIO, Kalmar University, Sweden. p. 85-93, 2000

Addtional Notes

To make the results from two different studies more comparable, a modification of the Sri Lanka study was made, assuming a 50% coral cover and 50% extraction rate instead of 100% coral cover and 100% extraction rate. In southern Sri Lanka, the live coral cover is actually in the range of 20-80%. A comparison could then be made between Lombok, with an economic NPV of coral mining estimated at US$ -33,000 and for Sri Lanka, at a range of US$ -6,946,000 to US$ -76,000. All data per km^2 in NPV terms.

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