Mineral Rent Investment Funds

Abstract

As the above quotation shows, the British economist and Nobel laureate Sir John Hicks defined income as the maximum value a man can consume during a week and still expect to be as well off at the end of the week as he was in the beginning. Money withdrawn from one’s bank account in excess of the interest it yields is not income, and financing one's consumption out of one’s savings is not a sustainable activity, as most people know well enough. These elementary ideas have a straightforward application in mineral economics. Given that mineral resources are finite, exploitation of such resources is not a sustainable activity. By investing an appropriate share of mineral rents in productive assets it is possible to preserve mineral wealth, albeit in a different form, and to turn the exploitation of mineral resources into a sustainable activity in the sense of permanently raising the standard of living.