Large scale gold mining has made a substantially positive impact on the economy of Peru, according to the latest report from the World Gold Council. The report examined the top producing gold mines operated by World Gold Council member companies in Peru, namely Yanacocha (Newmont, Buenaventura), Cerro Corona (Gold Fields), Lagunas Norte (Barrick) and Orcopampa (Buenaventura) as well as data from the planned Minas Conga project (Newmont and Buenaventura).
There were a number of important findings based on the mines surveyed, including:
- Large-scale mining accounted for 61% or US$21.7bn of Peru’s total export revenues in 2010. Gold mining exports specifically totalled US$7.7bn in 2010, of which 41% came from the four mines included in this study.
- There are indications that Peru’s economy is diversifying as can be seen from the lessening dependence on exports from these mines – in 2011 the sample mines represented approximately 12% of total mining exports and 6% of exports verses 20% and 12% in 2009 respectively.
- Contribution to Peru’s foreign direct investment (FDI) reached 6.6% and the mines’ total expenditure was over US$1.4 billion in 2011, with the 2012 projection exceeding US$2.3 billion, making this group of mines a significant contributor to foreign exchange reserves.
- Local impacts are equally significant; the mines’ aggregate employment level is set to peak in 2013 at 5,227 workers, with 98% being Peruvian nationals.
- The annual average of total salaries expected to be paid by the mines from 2012 to 2018 is US$337 million. In addition, salaries paid to residents of the local communities account for more than US$67 million per year giving a significant boost to both local and regional economies.
- It is estimated that the indirect job creation impact of these mines from 2005 to 2018 will average nearly 8,700 additional jobs annually, and will exceed 10,000 in both 2012 and 2014, based on the multiplier used for this study.
- The mines rely heavily on local procurement, strengthening linkages with the wider economy in Peru. The expenditure with national suppliers of those mines included in the study is expected to average 88% of their total procurement or nearly US$1.2 billion per year during the peak period 2007–13. In some years, this exceeds twice the amount of taxes paid by these mines and in turn generates additional revenues for the government.
- The local effects of the mines’ expenditure are noteworthy, with some US$165m being spent with community-based firms in 2011, more than double the previous year, suggesting that the local procurement programmes have increasing momentum.
Welcoming the report’s launch, Terry Heymann, Director of Responsible Gold at the World Gold Council said:
“This report shows gold mining has played a key role in the development of Peru’s national and local economies. The various interviews and case studies included in this report highlight the human impact stories about opportunities created by the gold mining industry and its impact in creating social welfare and sustainable development of communities. These thriving local businesses work with the mines and the transformative projects funded by the successful Voluntary Contributions Programme. Peru’s recent achievement of being recognized as the fourteenth country to become compliant with the requirements of the Extractive Industries Transparency Initiative (EITI), shows that mining companies, civil society and government can come together to ensure that mining can be a powerful force for social and economic development.”
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