EXTERNAL COSTS OF OPEN-CAST LIGNITE MINING FOR THE AGRI-FOOD INDUSTRY (AS ILLUSTRATED BY THE EXAMPLE OF THE OCZKOWICE MINE)

The purpose of this study is to calculate the externalitiesfor the agriculture and the agri-food industry ofplanned open-cast lignite mining on the Oczkowice reserve.The mine’s area of impact extends to 7 districts of south-westWielkopolska. The study envisages 2 options for the depressioncrater’s impact (mine dewatering) on crop productionand 2 scenarios of losses in livestock production. Losses dueto unrealized production in the agricultural and agri-food sectorswithin a 100-year time horizon (50 years of mining and50 years for hydrological recovery) are estimated to rangefrom PLN 22.4 billion to PLN 174 billion. Externals costs, definedas lost profits, are estimated to range from PLN 5.1 billionto PLN 39.5 billion. Compared to the value of lignitefrom the Oczkowice reserve, the level of external costs andproduction losses in the agricultural and agri-food sectorsmake open-cast lignite mining at that location an economicallyunviable project.