Gold industry generated over $210 billion for the global economy in 2012, new study finds
Published 8 October, 2013
Terry Heymann, Director of the World Gold Council’s Gold for Development programme, and Jason Burkitt, UK Mining Leader, PwC, discuss the research and its findings, with an introduction by Aram Shishmanian, CEO, World Gold Council
David Lamb, MD of Jewellery at the World Gold Council, discusses the PwC research and its relevance to the World Gold Council’s jewellery campaigns and market development initiatives.
Marcus Grubb, MD of Investment, discusses the relevance of the research findings to the investment market and the World Gold Council’s research programme.
The gold industry contributed more than US$210 billion to the world’s economy in 2012 - roughly equivalent to the GDP of the Republic of Ireland, Czech Republic or Beijing - new research released today reveals.
The direct economic impact of gold, an independent research report by economists at PwC and commissioned by the World Gold Council, is the first to take into account the entire value chain from large scale mining supply to consumer demand in order to quantify how gold contributes to local and global economic development. To date, research of this kind has typically been confined to examining the value created by a particular project, event or company in a specific market segment or country. Download the full report here: www.gold.org/gold-mining/economic-contribution
The study estimated that large scale gold mining alone made an economic contribution of over US$78.4 billion to the economies of the top 15 mining countries in 2012. Gold mining is a significant source of growth and wealth creation in some developing countries with its impact being greatest in Papua New Guinea (15% of GDP), followed by Ghana (8% of GDP) and Tanzania (6% of GDP). For these nations, gold is a major source of exports and, therefore, foreign exchange earnings. In 2012, gold provided 36% of all Tanzanian exports and 26% of the exports of Ghana and Papua New Guinea.
As well as the global contribution made by mining, the recycling of gold made up 36% of global supply in 2012. The economic impact of global gold recycling is estimated to be in the region of US$25billion.
The total economic contribution of gold is likely to be considerably greater than this study of large scale gold mining indicates, if all global gold mining activity were able to be included.
Demand for gold, including investment purchases of small bars and coins, gold jewellery fabrication and consumption generated an estimated US$110 billion across the top 13 gold consuming countries.
Terry Heymann, Director of Gold for Development at the World Gold Council, commented: “From mining and refining, to fabrication and consumer demand, it is clear that gold makes a positive contribution to economic growth along the entire value chain. In particular, consumer demand for physical gold products from the 13 largest gold consuming countries directly generated very substantial economic value: around US$110 billion in 2012.
“These new findings pave the way for further research examining the total economic contribution gold makes, which would cover both the direct, as well as the indirect, impacts on the economy such as secondary employment, additional taxation and the funding of third party support services.”
Jason Burkitt, UK Mining Leader, PwC, said: “With the global mining sector facing challenging times and increasing costs, transparency is vital – and this research is important as it examines the economic value generated by gold and where that value is created.
“The industry does make a significant impact globally, and this report helps us to understand better the fundamental role that gold plays in advancing economic development.”
The prime metric for evaluation was gross value added (GVA), which measures the contribution to gross domestic product (GDP). GVA is used because it measures the industry’s economic contribution to the economies in which they operate and is a direct comparison with GDP. Employment figures and taxes paid were also analysed.
For further information please contact:
James Murray Gill Carson,
World Gold Council Media Relations, PwC
T+44 (0)20 7826 4754 T +44 (0)20 7212 1391
M +44 (0) 7834 524069 M +44 (0)7715 487553
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Notes to editors:
About the report methodology:
As part of its work as the market development organisation for the gold industry, the World Gold Council commissioned leading experts at PricewaterhouseCoopers LLP (PwC) to estimate the direct economic and fiscal contribution of gold in the world’s major gold producing and consuming countries. It is the first report of its kind – there is no other study that analyses the gold industry’s total economic impact globally.
The report focuses on the 15 major gold producing countries [China, Indonesia, Mexico, Ghana, United States, Russia, Australia, Peru, South Africa, Canada, Brazil, Papua New Guinea, Argentina, Tanzania, Uzbekistan] and the 13 major gold using countries [India, China, United States, Turkey, Thailand, Vietnam, Russia, Indonesia, Saudia Arabia & Yemen, Switzerland, Egypt, Germany, United Arab Emirates], which together accounted for at least three quarters of global gold mine production and gold demand.
The report covers 2012 and examines the key stages in the gold value chain. The analysis of the supply of gold focuses on mine production and the recycling of gold, whilst the gold demand analysis focuses on gold fabrication (primarily for jewellery and technology) and certain forms of investment (principally bar and coin).
The analysis does not examine the economic impact of holding gold on portfolio performance. No consideration is given to the social and environmental impacts associated with the supply of and demand for gold, and the impact from less formal gold production.
The primary measure used was gross value added (GVA), which measures the contribution to gross domestic product (GDP). GVA is used because it measures the industry’s economic contribution to the economies in which they operate and is a direct comparison with Gross Domestic Product, which is used worldwide to measure economies’ economic output. Employment and taxes paid were also considered.
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.
We provide insights into the international gold markets, helping people to better understand the wealth preservation qualities of gold and its role in meeting the social and environmental needs of society.
Based in the UK, with operations in India, the Far East, Europe and the US, the World Gold Council is an association whose members include the world’s leading and most forward thinking gold mining companies.
PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us atwww.pwc.com.
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