African buzz
Mining remains key driver of change
Many of the world’s poorest countries have become more dependent
on their income from mining, despite a decline in commodity prices,
new research published recently has found.
The International Council on Mining and Metals (ICMM) released
the fourth edition of its Mining Contribution Index (MCI), which
ranks 182 countries according to the relative economic importance
of mining to their economies.
“It also shows the need to diversify and invest in other areas to
insulate their economies from vulnerability to the commodity
cycle,” says Davy.
The MCI combines data on mining’s contribution to countries’
gross domestic product (GDP), export earnings, and mineral
rents that are paid to host governments. It indicates the
importance of mining in the economic life of a country and the
potential for this to translate into economic and social progress
— although it does not tell us whether this potential has been
realised. This question was examined in ICMM’s report on Social
progress in mining-dependent countries.
The data shows that Suriname in South America has risen 46 places
to top the MCI. Major factors in this were doubling of metals and
minerals production value since the last index, combined with a
38% drop in GDP. The drop in GDP has the effect of significantly
increasing the components of the index that are referenced as a
percentage of GDP. The three biggest gainers similarly experienced
significant declines in their GDP and positive increases in mineral
export contributions. Fifteen of the top 25 ranked countries are
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Published every two years, the latest edition confirms that
between 2014 and 2016, many of the world’s most mineral-
dependent countries became even more dependent on the
economic contribution of mining, despite falls in commodity
prices over this period. According to Aidan Davy, ICMM’s
chief operating officer, 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.
Mining is still a key driver in the economies of middle-income countries.
African. The GDP at purchasing power parity (PPP) per capita for
Africa was stable between 2014 and 2016; however, in absolute terms,
it dropped from USD1.783-trillion to USD1.511-trillion in 2016
(a drop of 15%). This has contributed to a significant rise in several
countries’ production value and/or mineral rents as a percentage of
GDP, which has a bearing on African countries dominating the
top 25. This fourth edition is produced using data from 2016, when
minerals and metals prices were still in a sustained period of decline.
The findings show that, as with past editions, many low-income and
middle-income economies remain dependent on the mineral sector.
This year’s top 25 is completely dominated by low-income 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.
JANUARY - FEBRUARY 2019 AFRICAN MINING
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