When a volcano erupts, it throws out a lot of ash. At short notice, this ash can be very harmful to the environment, but on the long term, the ash layer, which contains many useful minerals, will be converted to a very fertile soil. Nearly everywhere volcanoes are located people use the rich soil for farming. Even after an eruption, people still return because of the fertile soil.
Also, volcanoes can produce very spectacular scenery like the beautiful sunsets caused by explosive eruptions. Other features include plant-rich environments, stunning eruptions, beautiful lava fountains etc.
Small active volcanoes at Papua-New-Guinea, deep beneath the sea, have thrown precious metals out of the earth. The sea-bottom there contains so much gold and other metals that commercial ventures are being investigated. There, cold sea-water trickles through the rocky bottom downwards where it is being heated by magma chambers. Then, very hot water (up to 350 degrees Celsius) rises. The hot water takes several minerals with it on the way upwards. When these minerals come in touch with the cold sea-water they will precipitate on the sides of the little volcano.
Magna rising from deep inside the earth contains a range of minerals. As the rock cools, minerals are precipitated out and, due to processes like the movement of superheated water and gasses through the rock, different minerals are precipitated at different locations. This means that minerals such as tin, silver, gold, copper and even diamonds can be found in volcanic rocks. Most of the metallic minerals mined around the world, particularly copper, gold, silver, lead and zinc are associated with rocks found deep below extinct volcanoes. This makes the areas ideal for both large scale commercial mining and smaller scale local activities by individuals and small groups of locals. Active and dormant volcanoes have the same mineralisation, so like extinct volcanoes, they are rich sources of minerals. Hot gasses escaping through vents also bring minerals to the surface, notably sulphur, which collects around the vents as it condenses and solidifies. Locals collect the sulphur and sell it.
Geothermal energy means heat energy from the earth. It's unusual to use the heat directly, by building your house on top of a steam vent for example, because it's unpredictable, dangerous and messy.
The heat from underground steam is used to drive turbines and produce electricity, or to heat water supplies that are then used to provide household heating and hot water. Where steam doesn't naturally occur it is possible to drill several deep holes into very hot rocks, pump cool water down one hole and extract steam from another hole close by. The steam isn't used directly because it contains too many dissolved minerals that could precipitate out and clog pipes, corrode metal components and possibly poison the water supply.
Countries such as Iceland make extensive use of geothermal power, with approximately two thirds of Iceland's electricity coming from steam powered turbines. New Zealand and to a lesser extent, Japan, also make effective use of geothermal energy.
Volcanoes attract millions of visitors every year, for different reasons. As an example of the wilder side of nature, there are few things that can beat seeing an erupting volcano blowing red hot ash and rock thousands of feet into the air. Even the less active ones that are just puffing out steam and smoke are impressive sights and attract tourists from around the world. Around the volcano may be warm bathing lakes, hot springs, bubbling mud pools and steam vents. Tourism creates jobs in shops, restaurants,hotels and tourist centres / national parks. Locals economies can profit from volcanism throughout the year, whereas skiing, for example, has only a limited winter season.
A lot of volcanic products can be used in everyday life. Sulphur, for example, can be used as an ingredient in matches, or in medicine, while the finer volcanic deposits, such as the gravels and sands found in rivers, can be used as building materials.
Due to the infrequency of some volcanic eruptions, some people, particularly those who have not experienced a volcanic eruption in their lifetime are reluctant to leave their homes in order to move to safety and ignore warning, preferring to live with the threat of a volcanic eruption. Some believe that there will be time to move / be resuced should an eruption begin.
It should also be recognised that some people have no choice but to live in these areas. In areas of poverty, people do not have the resources available to move and for many farming on the fertile soils in the shadow of a volcano may be the only livelihood they know.
Sources:
http://geobytesgcse.blogspot.com/2007/01/living-with-volcanoes.html
http://www.rps.psu.edu/jan2000/volcano.html
http://www.geography-site.co.uk/pages/physical/earth/volcanoes/why%20people%20live%20near%20volcanoes.html
http://library.thinkquest.org/17457/volcanoes/advantages.php
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