Whether or not a worker’s fear of job loss is rational, the negative feelings may have harmful effects on mental health and wellbeing. In fact, it has been hypothesised that increased fear of job loss during periods of high unemployment is an important reason why poor macroeconomic conditions increase symptoms of mental ill-health, mental health related hospitalisations, and suicide rates. Nevertheless, few studies can claim to have causal evidence on the relationships between macroeconomic conditions and job insecurity, and between job insecurity and mental health and wellbeing. In this paper we implement a unique identification strategy to shed light on these relationships. Using unusually detailed longitudinal data, we focus on mining workers, and explore how perceived job security and mental health varies with world commodity prices. Our results suggest that changes in world commodity prices strongly impact upon perceived job security, but not other aspects of work or life. We also find that world commodity prices, through their effect on job security, impact upon mental health and wellbeing.