1. The role of gold mining in supporting socio-economic development Andrew Britton | 29 September 2015

2. World Gold Council report  Provides a quantitative analysis of gold mining’s contribution to socio-economic development  Focuses on large scale (commercial) mining only  Scope includes: → Data from 47 top producing countries - over 90% of all listed gold production → Direct and indirect impacts → Review of a wide range of industry and academic literature Report available at: www.gold.org

3. “Defying the predictions of those who believe that Africa is gripped by a ‘resource curse’, many resource-rich countries have sustained high growth and improved their citizens’ daily lives.” Kofi Annan, former UN Secretary-General (1997-2006)

4. Gold mining’s contribution to the global economy  In 2013 gold mining directly and indirectly contributed US$171.6 billion to the global economy Direct GVA (US$bn) of the global gold mining industry from 2000 to 2013 Source: The World Gold Council (2015) The social and economic impacts of gold mining

5. Development of gold producing nations  Increasing importance of developing countries to global gold production  In the last decade the majority of mining economies have shifted from lower income to middle or higher income status Changes in income status between 2003 and 2013 amongst the same group of gold producing countries Source: The World Gold Council (2015) The social and economic impacts of gold mining

6. Importance of gold mining to national economies  Amongst the economies of many gold producing African nations, gold mining is a significant component of industrial production Sectoral Value Added - 2012 (% of national GDP) CountryAgriculture Industry (inc mining, manufacturing, utilities and construction) Services (inc Government, wholesale and retail trade, transport, financial and professional services) Gold Mining Mali38%21%32%16.0% Burkina Faso33%25%36%10.9% Ghana22%28%47%8.3% South Africa2%26%62%1.5% Source: The World Gold Council (2015) The social and economic impacts of gold mining

7. Gold mining value creation can exceed foreign aid  The in-country value creation of gold mining now exceeds the value of overseas development assistance (ODA) in some African gold producing countries 20002012% change US$ millions GhanaODA 5981,808202% Gold mining GVA 2733,4761174% MaliODA 2881,001248% Gold mining GVA 1931,689777% Cote d’IvoireODA 1612,6361542% Gold mining GVA 174642635% TanzaniaODA 1,0642,832166% Gold mining GVA 881,6911830% Source: The World Gold Council (2015) The social and economic impacts of gold mining

8. Creation of high value jobs  The numbers of jobs created by commercial gold mining may be limited, but the jobs that are created are high value  This creates both opportunities and challenges CountryNational per capita income (USD) Average gold mining salary (USD) Ghana1,76013,141 Cote d’Ivoire1,38016,250 Burkina Faso67014,782 South Africa7,19021,445 Comparison of the average gold mine employee wage compared to the national average wage (gross national income per capita) for selected gold producing countries in 2013 Source: The World Gold Council (2015) The social and economic impacts of gold mining

9. What is the role of the gold industry in supporting sustainable socio-economic development? Three key focus areas:

10. 1) Proactively address supply chain risks  Vital that the well documented social and environmental risks in gold supply chains are effectively – and demonstrably – addressed  Complying with international good practice standards opens access to markets and creates commercial opportunities

11. 2) Support governance improvement initiatives  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 Direct GVA growth and Corruption Perception Index change - 8 EITI implementing states Source: The World Gold Council (2015) The social and economic impacts of gold mining

12. 3) Align social investment with local needs  Corporate social investments can have significant benefits if carefully targeted at local needs  Example of mining company investments in healthcare provision – data suggests companies have made an important contribution to local and national healthcare initiatives Country Gold mining GVA growth 2003 - 2013 % change in infection rate for adult HIV 2003-2013 % change in TB prevalence from 2003- 2013 % change in malaria prevalence from 2003- 2013 Cote d'Ivoire1845%-55%-44%59% Ghana568%-38%-45%94% Tanzania335%-31%-30%-75% South Africa116%7%18%-55% Source: The World Gold Council (2015) The social and economic impacts of gold mining

13. Concluding remarks  The gold industry creates substantial economic value and is an important driver of socio-economic development in Africa’s gold producing nations  However, significant social, environmental and governance challenges remain  Realising the sustainable development potential of the gold industry requires collaboration across the gold value chain  Responsible business is not just the right thing to do – it creates commercial opportunity Thank you for your attention Andrew Britton | abritton@kumi.consulting www.kumi.consulting