Gold industry injected $171bn into global economy in 2013
While the gold industry had another tough go in 2013, a fresh study published Wednesday shows the sector contributed more than US$171 billion to the world’s economy, a little less than the total GDP for the Czech Republic and about half of Denmark’s national income.
Produced by the World Gold Council in association with Maxwell Stamp, a leading international economics consultancy, the document shows that the industry directly contributed around $83.1 billion to the global economy in 2013. Once the indirect economic impact is taken into account, this figure increases to US$171.6 billion.
“The report proves that the total economic impact of gold mining is significant and substantial,” said the head of member and investor relations at the World Gold Council, John Mulligan. “It is greater than the GDP of over 150 different countries and considerably larger than the total value of global overseas aid in recent years.”
The study summarizes the impacts of large-scale commercial gold mining in 47 countries that produce the precious metal, which account for over 90% of the world’s bullion output.
Jobs, human capital
One of the report’s highlights refers to employment generation. According to the study, gold miners directly employed over one million people in 2013, with over three million more people actively working in the industry, considering suppliers and support services.
It also shows that gold mining has made progress in seeking to develop local human capital and skills with over 90% of the industry’s employees being local workers.
“While there has been major progress in recent years in attempting to measure gold mining’s economic impacts, this has often been piecemeal or confined to a specific country,” said the author of the report, Andrew Britton, of Maxwell Stamp. “The lack of information has held back constructive debate on how to make the most of the shared value that a responsible gold mining industry can create for host nations and communities.”
Over 60% of the countries covered in the report are low or lower-middle income with substantial socio-economic development needs. But, according to the report, growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.
This may not hold true for South Africa, whose gold sector is facing major restructuring and where employment is expected to drop about 43% over the next decade.
The country’s Chamber of Mines said late May that about 31% of companies in the gold industry were operating at a loss and that the sector employment is expected to shrink down to 68,000 positions. By the end of last year, the sector provided 119,000 jobs.
The study also to shed light on gold-related revenue, noting that the majority of government profits from gold mining are derived from corporate and income tax, rather than from funds relating to permits and royalties.