Commodities

Gold Mining Instigating Global Growth and Benefits

There is a somewhat negative perception of the gold mining industry, and historically there has been just cause for this

When one thinks of gold, a few things spring to mind instinctively: currency, commodity, investment and jewelry. That’s the usual drill, the usual mind map created. But beneath the shiny front, literally and metaphorically, an entire world unfolds, and at the very core of this world is the gold mining industry.

There is a somewhat negative perception of the gold mining industry, and historically there has been just cause for this perception. However, a recent report by the World Gold Council (WGC) offers some thought-provoking insight into the flip-side of the gold mining industry and the positive effect it has on society. The report’s findings include some interesting social observations in relation to the gold mining industry – notably that over the past couple of decades, gold mining has significantly improved the lives of citizens, the skillset of the workforce and even the healthcare system in those countries which host gold mining companies.

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According to the WGC report, gold mining’s overall contribution to the global economy amounted to $171.6 billion in 2013 alone. This figure takes into account both direct and indirect value, with the most important areas of value distribution reflected in payments to suppliers, contractors and employees. Seeing as gold mining countries are often deeply impoverished nations relying heavily on foreign aid, what gold mining has achieved, to a certain extent, is to replace the need for foreign aid with real economic growth.

This has acted as a significant solution to socio-economic problems, as it equips the locals of these nations with the requisite ammunition to change their lives. Quoting The Commission on Growth and Development, the report states, “Growth is not an end in itself. But it makes it possible to achieve other important objectives of individuals and societies. It can spare people en masse from poverty and drudgery. Nothing else ever has.”

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The report also highlights that gold mining has contributed to a substantial improvement in healthcare for the citizens of host countries. Given the fact that the majority of these countries are developing economies in Asia and Africa, there is a considerably high rate of diseases such as malaria and tuberculosis. Due to the fact that such illnesses hinder efficient productivity and lead to increased absenteeism from work, it has been a natural development for gold mining companies to invest in healthcare in order to combat such problems, contributing as a result to the overall health and life expectancy of locals. It’s interesting to note that the more the gold mining sector expands in these countries, the lower the rate of diseases recorded.

Local skillsets have also been impacted in a positive way, as gold mining companies have focused on offering skills development of a high caliber to their workers, almost all of whom are locals. At the very top of the skillsets developed are technical skills, due to the nature of the gold mining industry, followed by health and safety, and emergency response skills. While the gold mining industry may be making the investment for its own immediate benefit, ultimately these skills are transferable to other industries, meaning that the local workforce is empowered with practical, transferable knowledge, which is of benefit to a number of different sectors.

No matter what the benefits of the gold mining industry, or the improvements still needed, one thing that is made very clear from the findings of the WGC report is that the gold industry goes far beyond the yellow metal we’ve all come to recognize in finance and jewelry. Behind the scenes, it has adopted a huge role within the global economy as a catalyst for growth.

The report’s findings make it abundantly clear that if gold mining companies and local governments join forces, the positive effects on the economy and the lives of locals could be immense. Of course, there are always more improvements to be made and there are still some problems that the industry as a whole needs to address. But this is a step in the right direction, not only because of the potential for positive growth and engagement, but most importantly because positive change will come faster if there is transparency and openness.

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