Mineral Processing in an Open Economy.

The subsequent sections of the paper are organized as follows: In a model with perfectly malleable capital, we first demonstrate the Dasgupta result of independence of the level of processing from domestic preferences, a conclusion that follows from the standard free-trade condition that the domestic and foreign marginal rotes of transformation are equal. The alternative fixed capital model is then developed, and we describe the resulting time paths of extraction, processing, and mineral exports and show the relationship of processing capacity with the discount rate, The third section summarized the processing incentives in Ontario, one of Canada's largest mineral exporting provinces, and simulates the model with parameters derived from the Canadian copper industry. Tentative conclusions are offered in the final section. [ABSTRACT FROM AUTHOR]