Mining has grown rapidly and is expected to continue to develop solidly in the future with the economic
development in China. Based on this trend, how an increase in the outputs of mining sectors affects
household income and poverty alleviation is an issue worthy of study. A multiplier decomposition
method within a social accounting matrix (SAM) framework shows the linkages through which a mining
sector's output contributes to household income growth and poverty alleviation. The decomposition
applied to China reveals that mining development has more significantly positive impacts on the high
and middle income household than low income household. Moreover, the decomposition incorporated
with the Foster, Greer and Thoerbecke (FGT) poverty measure shows that the ‘coal’ sector contributes
most to poverty alleviation and the low income household group, which has the biggest poverty rate, is
the smallest beneficiary from the mining development. Thus, the policy implication is proposed that the
government should give appropriate adjustment on the distribution of income between rich and poor
households and help the unskilled human capital from the household group at a low income level to
handle advanced technology of mining through education and training to reduce poverty more
effectively.