While rising labour productivity is ultimately good for both company and overall economy, its immediate effect at the local level could be seen as twofold. In the short term, increases in labour productivity may result from both staff downsizing, with an obvious negative impact on local employment, and/or boosts in output, which may increase supply requirements, tax payments, and all those contributions that are a function of production.

Higher productivity may also result from better technology and managerial practices, and may as well explain skill driven higher wages, which in the mid and long term are assumed to spill over to the rest of the economy. The more dependent a local economy is on direct employment and income from the mine, the more difficult it will be to perceive the indirect benefits from increases in company productivity. In RPM, productivity growth up to 1996 was predominantly explained by staff reduction, while from 1996 onwards it was almost entirely due to changes in tonnes treated.

When it comes to the contributions to government revenues, Brazilian fiscal structure is highly decentralized and confers collection and administration responsibilities to state and local governments. In 2001, more than 30 per cent of taxes paid by RPM went to the regional or local level. Income tax is the greatest levy at the national level, while ICMS (purchase tax) is highest regionally, though 25 per cent of it is passed over to the local government to cover running expenses.

Payments for materials and services are another important contribution to the economy. The level of sourcing (payments to suppliers) from within a given economy is the most commonly used proxy for backward linkages, which provide opportunities for production and employment by domestic suppliers in medium and small enterprises, and constitute a direct channel for knowledge diffusion that can assist in upgrading domestic businesses.