Gold has been the luster of kings, merchants and commoners for many centuries. One key consideration in the latter part of the 20th century, the beginning of the 21st century and into the centuries ahead is that gold mining is not quite what it used to be. Much of the world’s gold comes from stripping massive amounts of earth rather than just from digging for gold veins in underground mines, and much of this takes place in nations that many people in the world have either never heard of nor can locate easily on a map.

Mining and producing gold obviously generates a significant economic benefit. The social costs must be considered as well. The World Gold Council (WGC), a pro-gold group, has issued its report on the social and economic impacts of gold mining. It would normally be expected that the WGC’s views are universally positive, yet sometimes the group issues views that are cautious regarding gold trends.

Topics covered by the new report are the total economic contribution, the number of gold jobs around the planet, what sort of income is in host nations, how gold’s contribution has grown, and more. This one looks more pro-gold than some of the trend reports.

The WGC showed that the total contribution is more than $171 billion to the global economy, with the breakdown being a direct and indirect contribution. The WGC said:

Globally, the gold mining industry directly contributed around $83.1 billion to the global economy in 2013 — equivalent to the combined gross domestic product of Ghana and Tanzania. Taking indirect economic impact into account this contribution increases to $171.6 billion.

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The total number of jobs that result from commercial gold mining is now roughly 4.2 million around the globe. The WGC said that gold-mining companies directly employed over a million people in 2013, but another 3 million people were employed in other aspects of the industry via suppliers and support services. Also, in most gold-producing countries more than 90% of the gold industry’s employees are shown to be local workers.

In the income quality of these jobs, the WGC shows that mine worker salaries are consistency higher than the national average and they may support many dependents in nations where the opportunity may otherwise be limited.

Another notion discussed on the social aspect is how gold mining has made good progress in developing local human capital and skills. The WGC showed that over 60% of the countries covered in the report are lower income or lower-middle income with substantial socioeconomic development needs. It also shows that growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.

Another aspect of economic contribution at the local level was that some 70% of the value that gold-mining companies distribute within an economy relates to payments to local suppliers and employees. Also, the majority of government revenues from gold mining are derived from local corporate and income taxes rather than coming from moneys tied to mining permits and royalties.

Perhaps what may be the lynchpin of the report is how much the economic contribution has grown over the past decade. From 2000 to 2013, that direct global economic contribution was shown to have risen sevenfold, greater than the raw increase in the value of gold over the same years. Still, in 2013 the industry contributed around 16% less to the global economy than it did in 2012. That was still shown to be almost 14% more than in 2010.

The top 30 gold-producing nations were: China, Russia, United States, Australia, Peru, South Africa, Canada, Ghana, Mexico, Indonesia, Brazil, Papua New Guinea, Tanzania, Mali, Argentina, Kazakhstan, Chile, Burkina Faso, Turkey, Congo (DRC), Philippines, Dominican Republic, Ecuador, Kyrgyzstan, Guinea, Suriname, Côte d’lvoire (Ivory Coast), New Zealand, Mongolia and Egypt.

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Unfortunately, most of the details from the WGC report are based on 2013 data. That may still be much faster than data collected by governments, but gold was trading just under $1,200 at the start of June 2015, versus trading mostly in the $1,200 to $1,400 range is 2013.

Other key data points are listed as follows:

Gold mining jobs may not be as numerous as jobs in other industries, but they are high value — the apparel sector in India employs four times as many people as gold mining does globally, but generates less than 10% of the value generated by gold mining.

Academic studies on conflicts between communities and mining companies have identified several instances where project delays as a result of conflicts with local communities cost the projects around US$20m per week as a result of delays to production.33 A study of 26 gold mines owned by 19 publicly traded companies between 1993 and 2008 found that around two thirds of the estimated value of the gold controlled by these companies was related to the companies’ management of external relationships with host communities and governments.

There is a positive correlation between the growth of commercial gold mining in countries that have implemented the Extractive Industries Transparency Initiative and reductions in corruption.

Mines have a long operating life; typically around 30 to 40 years. Revenues from mining can enable investments in food security, healthcare, education, infrastructure and economic diversification, thus ensuring that the development of finite mineral resources provides enduring benefits to host nations.

China is the world’s largest gold producing country, followed by Russia, the USA and Australia. In all of these countries, despite the value of the gold produced, the gold mining industry contributes considerably less than 1% to each country’s national economy. In the economy of the next largest gold producer, Peru, a country synonymous with gold mining since the time of the Incas, gold mining is more significant in the national economy but nevertheless remains the source of only 3% of the country’s gross domestic product (GDP).

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