Mining projects across the globe face controversy over the loss of community welfare, particularly to the detriment of vulnerable groups. However, few studies have analyzed how extractive activities affect community and individual welfare from a national micro-scale perspective. Using data from the China Family Panel Studies (CFPS), this study examines how mining activities impact the well-being of surrounding communities and the loss of livelihoods and health experienced by vulnerable groups within communities. The results showed that mining caused 18.5% of income loss and 13.6% of health loss among community residents. Vulnerable groups suffer more than the average community member. For example, women lost 28.1% more personal income than men. Differences in the ability of different groups in the community to resist adverse shocks from mining also exacerbate the level of inequality within the community. Mining has led to a 1.7% increase in community inequality. Communities close to mining activities have a higher poverty incidence than others (33.9% increase). However, the impact of extractive industries is spatially heterogeneous due to geographic, cultural and economic differences. In some areas resource extraction has contributed to community well-being (i.e., mountainous areas). These findings encourage decision makers to adopt more flexible resource management mechanisms.