May 17, 2020

Report: What are the social and economic impacts of gold mining?

World Gold Council
Report
Gold
Infographic
Admin
3 min
Report: What are the social and economic impacts of gold mining?
The World Gold Council (WGC), a market development organization for the gold industry, has released a new report on the social and economic impacts of g...

The World Gold Council (WGC), a market development organization for the gold industry, has released a new report on the social and economic impacts of gold mining and its implications for growth and development.

The findings show the gold industry directly contributed $83.1 billion to the global economy in 2013 through their production activities and expenditure on goods and services. Taking indirect economic impact into account, this contribution skyrockets to $171.6 billion.

That’s more than the combined gross domestic product (GDP) of Ecuador, Ghana and Tanzania.

“The report proves that the total economic impact of gold mining is significant and substantial,” said the head of member and investor relations at the World Gold Council, John Mulligan.

• Related content: New Silk Road: How China's $16 billion fund will impact the gold mining industry

“It is greater than the GDP of over 150 different countries and considerably larger than the total value of global overseas aid in recent years.”

The report by WGC summarizes the impacts of large-scale commercial gold mining in 47 gold producing countries, which accounts for 90 percent of the world’s gold production.

Gold mining companies directly employed more than one million people in 2013, with 4.2 million more people employed as a result of procurement services.

• Related content:  [VIDEO] World Gold Council releases Q1 2015 Gold Demand Trends report

The report also highlights the social impact of gold. According to the report, gold mining has made significant progress in seeking to develop local human capital and skills. It shows that over 90 percent of the industry’s employees in most gold producing countries are local workers.

“Our findings highlight that commercial gold mining is a major source of income and driver of economic growth, playing an important role in supporting the sustainable socioeconomic development of host nations and communities,” Mulligan said.

The report states there is a positive correlation between growth in gold mining’s impact on host economics and improvement in income status in these countries. Over 60 percent of the top 30 gold producing countries are low or lower-middle income countries.

The report also gold mining plays an important role of value creator and generator. Mine worker salaries are consistently higher than the national average. In many countries with limited employment opportunities, these mining jobs often support many dependents.

The report found that gold mining companies can also accelerate impactful development projects that improve the socio-economic conditions of host communities well beyond the mine.

One major key finding is that healthcare is a significant focus area for gold mining companies, particularly HIV/AIDs, tuberculosis and malaria.

In a significant number of gold producing countries, the growth of gold mining over a ten-year period coincides with a clear reduction in the prevalence of these diseases. 

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May 7, 2021

Lithium producers bullish as EV revolution ramps demand

Lithium
Electric Vehicles
Albemarle
SQM
3 min
Lithium producers are drawing optimism from rising prices for the electric vehicle battery metal

Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.

Lithium

Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.

Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.

Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.

U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.

Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.

The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.

Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”

Albermarle

Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.

Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.

“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.

The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.

Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.

Electric Vehicles

Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.

Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.

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