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CAPE TOWN (miningweekly.com) – The contribution of the expenditure of the gold mining sector to the economic good of countries in many parts of the world easily beats the collective aid budgets of governments.
World Gold Council (WGC) development MD Terry Heymann outlined during a panel discussion at the Investing in African Mining Indaba, in Cape Town, that there is the significant potential for gold mining to be a major catalyst for economic growth and development globally.
The gold spend of $47.3-billion in 2013 to suppliers, communities and governments, for instance, was nearly $10-billion more than government aid budgets of $37.4-billion.
Moreover, 79% of the outlay remained in the countries where the mining had taken place. Seventy-one per cent was made up of payments to suppliers, amounting to $26.4-billion; 17% went to communities at $6.4-billion; and 12% was made up of payments to governments at $4.6-billion.
The WGC’s 15 members employed 161 916 employees and contractors and of the $47.3-billion member companies spent in 2013, only a moderate 8% went to providers of capital, 13% to other out-of-country payments and the overwhelming amount of $37.4-billion – one percentage point short of 80% – to in-country payments.
Panelist Johan Ferreira, the VP of Newmont Mining Africa, said mining companies were making a point of procuring from local companies and maximising local content wherever a business case presented itself, in the knowledge that small and medium-sized enterprises (SMME) were the engine of economic stimulus of any country.
For Newmont, SMME stimulus formed a critical part of the company’s contribution in Ghana, where efforts to facilitate the building of business relationships between small companies and big companies featured strongly.
African Mineral Development Centre interim director Kojo Busia said that the issue of local content needed to be tackled holistically by bringing together the key parties from the onset, formulating a vision and a specific policy to arrive at that vision.
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