THE significance of gold mining to the national economy of Papua New Guinea has been highlighted in an international report on the economic impact of the precious metal.
A 54-page report compiled by PricewaterhouseCoopers for the World Gold Council revealed that the significance of gold mining to a national economy was greatest in PNG.
Gold mining contributes a total of 15% of PNG’s gross domestic product, followed by Ghana (8%) and Tanzania (6%).
The report states gold mining is one of the most significant sources of wealth creation in the economy, especially when added to the indirect and induced effects of gold mining.
It covers gold's use in jewellery through to manufacturing and employment, supply and demand, fabrication and consumption and investment.
Global gold supply reached 4,477 tonnes in 2012 with approximately two thirds coming from mining and one third from the recycling of gold, with gold exports totalling 26% of exports in PNG.
The employment supported by gold mines is an alternative measure of economic contribution, with total direct employment in gold mining across PNG reaching an estimated 16,100.
PNG ranks 13th in a list of major gold producing countries with a production of 57t and a 2% share of global gold production.
World Gold Council chairman and New Gold executive chairman Randall Oliphant said the report was both ground-breaking in scope and timely in its analysis.
“It addresses, for the first time, the direct economic impact of gold on the global economy, and does so in a way which is objective in stance and rigorous in its treatment of complex data,” Oliphant said in the document’s foreword.
“The report is unique in looking at an entire value chain, including gold mining, refining, and fabrication and consumption.
“This is a time of change for the entire gold industry. The mining sector is facing a barrage of converging challenges; increasing costs, ever higher expectations from a wide range of stakeholders and a gold price which could call in to question the viability of some projects and lead to a contraction in supply.”
Oliphant noted demand was increasing, fuelled by expanding middle classes in Asia, diversification of reserve assets by central banks and a growing desire for physical gold amongst many Western savers.
He added: “I believe that it is only on the basis of a more realistic and better rounded understanding of gold’s true impact on our global community that the gold industry can further develop and sustain effective partnerships with all our stakeholders.”