by Greg Klein | June 3, 2015
The quest for yellow metal pumps considerable sums into host countries but government practices largely determine the effect on economic development. That was among the findings of The Social and Economic Impacts of Gold Mining released by the World Gold Council on June 3. Prepared by consultant Maxwell Stamp PLC, the report attributed to gold miners a 2013 direct global economic contribution of US$83.1 billion. Including indirect benefits, the amount came to $171.6 billion.
The numbers represent a nearly seven-fold increase from 2000, the WGC stated. The report notes that while most gold mining takes place in advanced economies, industry growth has shifted to less-developed countries. “Following the onset of the commodities boom in 2005, the economies of Asia and Africa, followed by South America, were the largest beneficiaries of GVA [gross value added] from gold mining.”
But “governments, especially in poorer countries, are not always open about the revenues they receive from extractive industries, which has an impact on the ability of their citizens to hold them to account.” The WGC credited the Extractives Industries Transparency Initiative for reducing government corruption, “a significant factor in the misuse of revenues from extractive industries. In gold-producing countries, this appears to be working.”
The report follows Canadian legislation that took effect June 1 requiring the country’s miners to report “payments including taxes, royalties, fees and production entitlements of $100,000 or more to all levels of government in Canada and abroad.”
Among groups that helped design the legislation was the Mining Association of Canada. MAC president/CEO Pierre Gratton said the law “places Canada at the forefront of international efforts to eliminate corruption and promote transparency.”
The WGC describes itself as “the market development organization for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership and be the global authority on the gold market.”