World Gold Council report highlights responsible gold mining’s continuing constructive impact on host economies
Published 23 October, 2014
Categories: Gold mining and sustainable development
The World Gold Council yesterday released its second Responsible Gold Mining and Value Distribution report at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development in Geneva. This edition of the report reinforces the continuing contribution responsible gold mining can make in supporting economic development in host countries.
As well as providing greater transparency and consistency on the data and analysis companies provide to investors and stakeholders about the economic impact of gold mining, this report offers real-life examples of how responsible mining can make a positive contribution to national infrastructure, businesses and local communities in host countries.
Based on data from 15 World Gold Council members, of the US$47bn paid out in 2013, almost 80% of that total spend (US$37.4bn) was incurred in the country of operation. From that spend, US$26.4bn (71%) went to suppliers, US$6.3bn (17%) on wages and US$4.7bn (12%) to the government in taxes and royalties. An additional US$3.8bn was paid to providers of capital (including dividends and interest).
Commenting on the report Terry Heymann, Managing Director of Gold for Development at the World Gold Council said: “Collaborative efforts from a range of stakeholders are needed to support sustained social and economic development. This report shows the continuing commitment of responsible gold miners to helping stakeholders understand the economics of mining. By developing a consistent and transparent approach to reporting costs and providing comprehensive insights on the monies paid to governments, businesses and employees, the report seeks to address concerns of a ‘trust and data deficit’ and highlight the contribution gold mining companies are making to national economies.”
Christopher Sheldon of the World Bank said: “One of the interesting facts in the report is the relative level of payments to suppliers. In order to maximise mining’s contribution to development we need to focus on how these payments to suppliers can benefit local business even more as well as promoting economic diversification through the use of local content.”
Glenn Gemerts, Chair of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development commented: “There is a growing trend of collaboration between governments and mining companies. This positive development is the result of work by people directly involved in the industry, and of better Corporate Social Responsibility policies that have been put in place by mining companies.”
The World Gold Council has worked with member companies to generate a common ‘Guidance note on expenditure definitions’ - which was used to develop the data in the report. This body of work is intended to provide greater consistency and transparency in the information companies provide to investors and stakeholders about the economics of gold mining and demonstrates responsible miners’ willingness to work collaboratively as an industry to achieve this.
Information from 87 producing gold mines and 60 ‘non-producing operations’ including exploration activities, pre-mine development and closed mine sites, across 26 different countries was used to produce the report, which aims to support the ongoing dialogue between governments and industry on the transformational potential of responsible gold mining.
Download the full report here: http://www.gold.org/gold-mining/economic-contribution/value-distribution.
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This survey includes data from 15 companies with operations in 26 countries with a total of over 160,000 employees and contractors. The 2013 figures include data from 87 producing gold mines and 60 ‘non-producing operations’ including exploration activities, pre-mine development and closed mine sites.
The quantitative assessment of the value distribution associated with gold mining companies has been undertaken by the World Gold Council, working closely with our members who represent the world’s leading gold mining companies. All gold-producing companies who are members of the World Gold Council were invited to participate. Each company was asked to provide information on payments by country and which of those payments went to the government, communities, individuals or commercial entities in the same country.
Companies were asked to include payments related to both producing operations and non-producing operations. Nonproducing operations may include exploration activities, pre-mine development, closed mine sites and corporate facilities.
Companies were asked to provide data on an attributable basis – i.e. only including data for the share of the operation that they own. This was to ensure that there was no double-counting in the case of joint-ventures, but it does mean that the total figures will under-represent the full effect of the operations included, where they are partially owned by companies or other entities who have not participated in this study. In submitting their data, companies were asked to follow the Guidance Note on Expenditure Definitions, as developed by the World Gold Council.
The World Gold Council consolidated the data on a country-by country and global basis. This information is not always readily available and so all the data have been provided on a good faith basis. The data have not been verified by the World Gold Council, nor audited and there may be differences between the data provided in this report and financial information released by individual companies, due to a number of factors, including reporting requirements, reporting boundaries and historical corrections. As such, no user should rely on the data as the basis for assessing company-specific financial performance.
It is intended, however, that the report will provide a valuable perspective on the total financial flows that gold mining companies generate. This report includes country level data on key economic and development indicators, as well as data about the total national gold production. These data – which are shown for each country under the heading ‘Country data’ – have been collected from internationally recognised sources, including the IMF, the UNDP, GFMS, Thomson Reuters and SNL Metals & Mining.
About the World Gold Council:
The World Gold Council is the market development organisation for the gold industry. Working within the investment, jewellery and technology sectors, as well as engaging with governments and central banks, our purpose is to provide industry leadership, whilst stimulating and sustaining demand for gold. We develop gold-backed solutions, services and markets, based on true market insight. As a result, we create structural shifts in demand for gold across key market sectors.