Mining for gold is an enterprise that has been going on for thousands of years and currently gold mining operations take place on every continent on the planet with the exception of Antarctica. The social and economic impacts are sizeable in the sense that the direct contributions that stem from the mining industry account for more than 80 Billion dollars whereas the indirect economic impact amounts to more than 170 billion dollars annually.
According to Gold.org from 2000 to 2013 the GDP contributions attributed to gold mining activities rose by 700 % and its role in host nations are equally sizeable based on the fact that 70 % of all expenditure by gold mining companies (payments for inbound and outbound logistics including contractors, suppliers and as well as employees) remain within the country. Another factor worth mentioning here is the fact that more than 60 % of the countries producing gold (top 30 countries) that account for 90 % of the global gold production are low to lower middle income nations and the positive relationship between the growth of gold mining activities with the improvements in income status is undeniable.
The substantial impact that that gold mining has on wealth creation in developing nations such as Papua New Guinea, where gold mining activities account for 15 % of their GDP, Ghana – 8 % of their GDP, Tanzania – 6 % of their GDP on top of earnings from foreign exchange attests to the fact that gold mining is in general a positive element for most countries.
However, the underlying issues that seems to shed a gloomy shadow over gold mining activities is the environmental impact it has on the region calling for better legislation to enforce responsible mining measures especially with regards to pollution of waterways. Social responsibility programmes have been on the priority list of most mining companies in light of the recent tight controls on how mining activities are conducted with priority given to communities within a hundred kilometre radius of where the mining is being done.
Other issues related to mining activities include areas where armed conflicts are taking place, that has been the driving force behind the ‘conflict free gold standard’ whereby any gold associated with armed conflicts or the undermining of human rights are ejected from the ‘gold based economic sphere’.
With the recent jump in gold cash value, mining activities around the world are expected to step up operations; however there are uncertainties involved that might cause mining operations to cap production to an extent until cash for gold prices are above 1,300 USD per ounce in order for the mining companies to be able to sustain their businesses.
The current gold prices have made it difficult for mining companies to sustain their operations in a profitable manner causing many of these companies to liquidate their non performing assets driving the prices of most gold related mining stocks down.
Nevertheless, as it always is, gold always recovers in due time and gold buyers just need to stick to their guns for the time being.
For more information on gold brokers in Australia, please visit the Melbourne Gold Buyers website.