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Rent

Rents in the context of the extractive industries is the difference between revenues and the cost of extraction. In the extractive industries the concept is particularly important given the sharply varying costs of production of a commodity that is sold at a set market price. Rents should be collected by government institutions and channeled through the budgetary process so that they can into productive public assets and contribute to sustainable development. However, this is often not the case in the extractive industries where there can be a large difference between rent and a normal rate of return on capital, or profit, which leads to rent-seeking behavior. 

Source: World Bank: Rent to Riches: The Political Economy of Natural Resource-Led Development (2012).

 

 

 

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