Strategies for Maximizing the Social Benefit from the Exploitation of Gypsum Mineral Resource of Thailand

Abstract

The study begins by investigating Thailand’s administration of its mineral resources and those of some other leading mineral-exporting countries for comparison. The notion of ‘resource curse’, which affects many resource-rich countries, and an analysis how Thailand fought and won the ‘curse’ is critically explored. The principle of sustainable development and its implication to Thailand are presented, together with various computed indicators of sustainable development for Thailand. The role of mineral resources and Hotelling’s model in the context of sustainable development are discussed. The essence of this study is the development of economic models to determine the optimal extraction paths of Thailand’s gypsum resources based on Hotelling's concept of maximizing Net Present Value (NPV) of benefits accrued to the country. This study finds that under all assumptions and all scenarios, at a certain point in time, Thailand should stop exporting its gypsum and devote the remainder of its gypsum resources to domestic consumption only. In addition, Thailand should push gypsum price up to a certain level. The model determining gypsum consumption in Thailand and some countries imported gypsum from Thailand, which are the basis to determine the optimal extraction paths of gypsum in Thailand, is also developed. It shows that the price of gypsum had no effect on its consumption. In other words, the demand for gypsum might be highly inelastic. Finally, the long-term policies for Thailand to manage its gypsum resource are recommended.