Engineering & Mining Journal

AUG 2018

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MINERAL ECONOMICS AUGUST 2018 • E&MJ 53 www.e-mj.com there are other remaining factors that should ideally be measured, but there is a lack of comparable data. For two of these, government revenues and em- ployment, there are currently no com- parable data available for most countries for all of 1996-2016. It is, however, important to give some preliminary re- sults for these two additional compo- nents of mining's contribution in spite of less than complete datasets. Further foreign direct investment and total in- vestments into mining could have been included, but have not because of a lack of transparent data. Government Revenues From Mining The capturing by governments of some part of total resource revenues as govern - ment revenues (mainly taxes and royal - ties) is crucial to generating development for many reasons, not least that the min- eral resources are considered non-renew- able. From IMF data, it's clear there is a lagged relationship between metal prices and government revenues. Metal prices start to trend upward in 2002-2003 and government revenues increased a year or two later in most counties that are shown in the graphic. Among the countries in this small sample, government revenues grew until 2011-2012 and then fell back sharply at least for some countries while continuing upward for others (e.g., Gha- na). This is probably explained by the fact that Ghana is an important gold producer and the gold price has not fallen as quick- ly as some of the base metals. The IMF data are not complete for the full period until 2016 and for Zambia and Guinea, there are unfortunately no recent figures. The quick growth of mining in Mongolia has resulted in an equally rapid increase of government revenues, but the volatility is also high, making it difficult for miner- al-rich countries such as Mongolia to plan for their futures. Changes in MCI-W Since 1996 Among the top 20 LIE and MIE in 2016, no less than 11 economies have climbed up one step since 1996 in the World Bank income-group classification. Zambia, Ghana, Guyana, Mauretania, Mongolia and Kyrgyz were countries that were classified as LIE in 1996, but in 2016 are classified as LMIE. Coun- tries that were classified as LMIE in 1996, but UMIE in 2014 are Peru, Su- riname, Botswana and Namibia. Chile became HIE between 1996 and 2016. There are, of course, many factors influ- encing these gradual economic develop- ments, but it seems likely that the con- tribution of mining and minerals is one important factor. When comparing the mining contribu- tion to national economies between 1996 and 2016 at the global level, a similar broad picture appears. There are, how- ever, regions and specific countries that have climbed up the rankings very signifi- cantly. West Africa, for example, is a re- gion that has now moved to the top of the MCI rankings. Individual countries, which have climbed in the MCI-W rankings can be seen in Table 7. Laos and Eritrea had no industrial scale mining in 1996 so when mining started, they went from al - most zero to a point today where mining is contributing considerably to their econ- omies. African mining countries, in par- Figure 3—Value of mine production by country (circles are proportional to value of mine production) (Source: Raw Materials Group). Country Classification % Exports Botswana UM 92.7 Sierra Leone L 88.2 Congo, Dem. Rep. L 86.0 Mongolia LM 82.5 Burkina Faso L 78.3 Zambia LM 75.0 Mali L 74.7 Nauru UM 72.1 French Polynesia H 64.9 Guinea L 61.6 Table 4—Top 10 mineral export contributors in 2016 (Sources: UNCTAD, World Bank).

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