A recent report from The International Council on Mining and Metals (ICMM) has revealed that mining is a proven key driver in low to middle income economies. According to the report, between the periods 2014 to 2016, many of the world’s most mineral-dependent countries became even more dependent on the economic contribution of mining. This is despite falls in commodity prices over the same period.
ICMM’s COO Aidan Davy said that the research shows the importance of getting the framework that governs mineral resources right if governments are to ensure that mineral wealth translates into broader-based economic and social progress. He further added that it also emphasizes the need to diversify and invest in other areas. This, he says, is with a purpose to insulate their economies from vulnerability to the commodity cycle.
The ICMM further notes that the Mining Contribution Index combines data on mining’s contribution to countries’ gross domestic product (GDP), export earnings and mineral rents that are paid to host governments.
It also indicates the importance of mining in the economic life of a country and the potential for this to translate into economic and social progress. However, it fails to elaborate whether this potential has been realized.
According to the data collected, Suriname has risen 46 places to top the Mining Contribution Index (MCI). This has been attributed to the doubling of metals and minerals production value since the last index combined with a 38% drop in GDP.
Similarly, the three biggest gainers experienced significant declines in their GDP and positive increases in mineral export contributions. Moreover, fifteen of the top 25 ranked countries are African. The GDP at Purchasing Power Parity per capita for Africa was stable between 2014 and 2016.
This year’s top 25 is completely dominated by low and middle-income economies since the departure of Australia and Chile, showing the significance of mining in the economic life of these countries, a trend that has continued across all four editions of the MCI.