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All That Glitters – How Gold Contributes to a Diverse Global Economy

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According to, gold mining companies are a major source of income and economic growth, with an important role in supporting sustainable socio-economic development. During 2013, gold mining companies contributed over US$171.6 billion to the global economy through their production activities and expenditure on goods and services.  For countries like China and Australia (both top gold-producing countries) – gold mining has been a profitable venture, but the industry usually only represents .25 to 1% of these countries’ gross domestic product (GDP) — a reflection of a diverse economy.  Even Peru, with its long tradition of gold mining stretching back to the Incas, has had gold account for about three-percent of the country’s GDP.

In a report that looked at the benefits of the gold mining industry to host nations, found that for “eight of the top 30 gold producing countries, the production and procurement activities of gold mining companies generate over 10% of each country’s gross domestic product. For two of these countries, this figure rises to over 25% of gross domestic product.3

However, the situation is very different for gold-producing countries that are considered “lower or lower-middle income countries,” often with perilous socio-economic conditions.  Gold mining in these countries represents much larger GDP.  For instance, reports that the GVA (gross value added) produced by gold mining in Burkina Faso and Suriname constitute around 44% of the industrial sector in each country, while in Mali it is around 76%.  

These gold-producing countries with lower to lower-middle incomes are often recipients of foreign financial aid.  However, a closer look at the economies proves that gold is quite the windfall and, in some cases, “…the value of the economic contribution of the gold mining industry has now overtaken the value of foreign aid received”.

“Gold has been a source of wealth and status since at least 4600 B.C. and, in modern times, most probably the most effective instrument to hedge against any decline in the value of paper investments, such as stocks and bonds and protect against political, social and economic uncertainty,” explains Anthony Allen Anderson, VP of Sales and Marketing at GSI Exchange, a leading gold and silver investment services company in Calabasas, California.

Many positive correlations can be found in lower or lower middle income gold-producing countries that play “host” to gold companies.  The revenues reaped from gold mining prove to help the overall infrastructure of the country.  In addition, the stability and longevity of the gold industry (a gold mine can be in operation for three or four decades) ultimately creates jobs, economic diversification, healthcare and security. even found that these countries saw a decrease in corruption thanks in part to the gold industry.

Revenues from gold mining companies are plentiful since “…payments to suppliers and employees account for 70% of the value that gold mining companies distribute within an economy – and host government treasuries collect far more revenue from income and employment taxation than they do from royalties,” according to

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