Study puts shine on gold mining's positive economic impact

Posted on Friday October 18, 2013

A recent break-through World Gold Council study quantifies the direct economic and fiscal contribution of gold mining for the first time.  The 54-page analysis titled “The Direct Economic Impact of Gold” was completed by management consultant PriceWaterhouseCoopers (PWC).

“The key measures used are gross value added (GVA), which measures the contribution to gross domestic product (GDP), employment and taxes paid,” explains the study.  “This is the first time that the available evidence on the contribution of gold has been collated.  As such, the report provides a baseline assessment of gold’s direct economic and fiscal contribution.”

In 2012, global gold production from mines (64% of total output) increased 15% to 2,861 tonnes from 2,498 tonnes in 2007.  The role of recycling is increasing. In 2012, 1,616 tonnes of gold (or 36% of total production) was sources from recycled precious metals. 

So where does Canada fit in as the seventh largest gold producer in the world.  In 2012, gold mining added about $4 billion GVA.  Ontario regularly accounts for more than 50% of Canada’s total bullion output. 

Employment in gold mining in the 15 countries central to the focus of the study is estimated at about 528,000.  Statistics Canada says more than 30,000 people in Canada were employed in the gold production industry in 2012.

Gold is a significant source of exports in many countries, including Canada.  The average amount of economic value added per ounce of gold was US $1,139.  The average GVA per worker in the gold sector was estimated at about US $300,000.

The precious metal is extremely significant to many national economies.  Gold accounts for 15% of the GDP of Papua New Guinea, 8% of the GDP of Ghana and 6% of the GDP of Tanzania. In looking ahead to the future, the capital expenditures in gold mining in the 15 nations central to study totaled about $17.7 billion in 2012.  Canada was the leader in gold mining capital expenditures at $2.6 billion followed by the U.S. with $2.4 billion and Australia with $2.3 billion.

The World Gold Council, which has its headquarters in London, U.K., says jewelry accounts for about 40% of gold consumption, with investment vehicles accounting for about 40%, followed by electronics, other industrial uses and dentistry.

The gold output of 15 countries (and their percentage of global production), which were the basis of this PWC study include China (14.4%), Australia (8.7%), United States (8.1%), Russia (8.0%), Peru (6.5%), South Africa (6.2%), Canada (3.8%), Ghana (3.3%), Mexico (3.3%), Indonesia (3.1%), Uzbekistan (2.6%), Brazil (2.4%), Papua New Guinea (2.0%), Argentina (1.9%) and Tanzania (1.7%).   Gold production can be found in all populated regions of the world.

The study emphasizes that it only analyzed the direct economic and fiscal impacts of mining.  It does, however, point to some methodologies that could assess the broader indirect and induced impacts. The World Gold Council is an international market development organization for gold.  Its 23 members are the leading gold producers in the world.  The full study can be found at