Social And Economic Impacts Of Gold Mining

Social And Economic Impacts Of Gold Mining

Gold mining is a global industry. Currently, there are more than 600 productive gold mines spread over 70 different countries, and these figures do not include artisanal and small-scale mining operations. Yet, despite the scale and geographic reach of the industry, gold mining’s impacts on economic growth and development are not well understood. Indeed, they are frequently neglected or misreported.

The World Gold Council set out to address this ‘information gap’ and offer the industry’s very diverse set of stakeholders – gold mining companies and their employees, government representatives, community leaders and wider civil society – empirical evidence of gold mining’s socio-economic impacts and a firm set of indicators by which change and progress might be judged.

A research program was initiated resulting in a series of research outputs, including those produced in collaboration with our Member companies, including Newmont, finally culminating in the recently published research report, and the social and economic impacts of gold mining. We believe this work, with its greater scope and more extensive inputs, advances our collective knowledge on the ‘shared value’ created by gold mining.

The findings from this research provide insights into how formal gold mining contributes to:

  • Supporting global economic growth
  • Supporting the development of host nations
  • Investing in people
  • Supporting community development

In 2013, gold mining made a total contribution of more than US$171bn to the global economy. Globally, the gold mining industry directly contributed around US$83.1 billion to the global economy in 2013. Taking indirect economic impact into account, this contribution increases to US$171.6 billion. This is greater than the GDP of more than 150 countries and more than the world’s total overseas aid budget.

Gold mining’s direct economic contribution to the global economy has increased seven-fold from 2000 to 2013. This is greater than the rise in the value of gold over the same period.

Total number of jobs that result from commercial gold mining estimated at 4.2 million globally. Globally, gold mining companies directly employed more than one million people in 2013, with three million more people employed as a result of the industry’s suppliers and support services. In most gold producing countries, more than 90 percent of the industry’s employees are local workers.

The report shows that gold mining has made good progress in seeking to develop local human capital and skills. More than 60 percent of the countries covered in the report are low or lower-middle income with substantial socio-economic development needs. However, the report indicates that growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.

70 percent of the value that gold mining companies distribute within an economy relates to payments to local suppliers and employees. The majority of government revenues from gold mining are derived from indirect sources, such as corporate and income tax rather than from money relating to permits and royalties or direct minerals taxes.

Overall, the research presents a picture of an industry that has developed significantly in terms of how it benefits the global economy and helps drive growth and progress at the national and community level, particularly in the developing world.

Of course, the gold mining industry still faces considerable challenges, not least in ensuring the growth and momentum of the socio-economic contributions detailed in this report are sustainable. Furthermore, this is unlikely to be done in isolation, by the gold mining industry on its own. Our ambition for this research is that it may help improve shared understanding around the industry to better inform productive engagement between stakeholders to maximize the growth and development potential of responsible gold mining.

Advertisements