ABSTRACT
This chapter considers the contribution of the American L.C. Gray to the development of the economics of mineral extraction. It discusses the way in which Gray explained the raison d'etre for his analysis of the economics of mining in the opening remarks of his later, mineral economics paper. Gray commences his discussion of the role of indestructibility by noting that there is no basis for rent which could not conceivably lose its utility. The discussion sets the scene for an analysis of Gray's treatment of the decision making behaviour of the profit maximising mine owner-operator, after which his more general treatment of various aspects of mineral extraction. In the mineral economics literature, the aspect of Gray's work which has elicited most critical comment is his treatment of the extensive margin. The major significance of Gray's contribution to the literature lies in his recognition that the mine owner, in making production decisions, takes into account the user cost of production.
