How Gold Mining Invests in People and Supports the Development of Human Capital

This article was contributed by the World Gold Council.

We have previously discussed how the findings from the World Gold Council’s recently published report ‘The social and economic impacts of gold mining’ indicates that the industry has added substantial value to the economies of gold producing nations. But we also need to consider how this translates into the abilities and prospects of the people in those nations – that is, how gold mining creates and distributes value to the local workforce, their dependents and their communities.

The development of ‘local content’ – which is quite simply investing in local people and the local economy via employment and the training of a local workforce, as well as the procurement of local services – is increasingly prioritized by governments and civil society. A 2013 study by McKinsey[1] noted that the vast majority of resource-driven economies have enacted legislation imposing local content quotas on mining companies.

Fortunately, the gold mining industry has responded well to this challenge. The WGC’s research suggests that in most regions across the globe, more than 90 percent of the employees at gold mining operations are local workers. The industry’s commitment and success in developing local employment is highlighted when we compare it with the oil and gas industry, showing a substantially higher proportion of local employees in all key regions. Even taking into consideration the different skills sets in these industries, the data strongly indicates that gold mining has been more successful in creating jobs for local people.


That said, it is important to acknowledge that modern, responsible gold mining does not employ vast numbers of people. We estimate that, globally, the formal gold mining sector employs around one million people. Taking into account the industry’s ability to support local supply chains and encourage economic development beyond the mine, we calculate another 3.2 million people are employed as suppliers or in support of industry roles.

But, returning to those million mining jobs, it is very significant that, in all key producing nations, they are of very high value. Across the board, a gold miner’s average wage is considerably more than the average national income. In developing nations, particularly those that have experienced rapid growth in gold mining’s contribution to their local economies, we note the industry often pays a multiple of the annual average income. This has very important implications when we consider that in many of these countries there are very limited alternative forms of employment and, therefore, each gold mining salary is very likely supporting multiple dependents. A study of gold mining in Mali[2], for example, suggests that each mining job supports around six dependents.

An area of continued challenge for the gold mining industry, one reflective of the whole extractives sector, is that of gender equality. As a sector, the mining workforce remains male-dominated. However, progress has been made in recent years, with gender equality now clearly a strategic priority for most gold mining companies. It is increasingly recognized that employing women can create a more stable and safer environment.

While the challenges to ensure greater gender equality in mining are not to be underestimated, there are some encouraging signs that the success and influence of women in mining jobs is now being noted. Newmont’s own study of the socio-economic impacts of gold mining in Ghana[3], for example, found that although women only represented a little over 11 percent of the workforce, on average, their salaries were 14 percent higher than the average male salary, reflecting that women tended to occupy higher, more skilled positions.

Formal gold mining, compared to other sectors such as manufacturing, does not require particularly large workforces. Nonetheless, gold mining can still be a very significant employer, particularly once the indirect impacts of local job creation by suppliers to mining operations are considered. Furthermore, gold mining’s impact on the development of local economies and the communities in which its employees reside is often far greater than those sectors that employ many more people.

[1] McKinsey, “Reverse the curse: Maximizing the potential of resource-driven economies” (2013).

[2] Jul-Larsen et al, “The Socio-economic Effects of Gold Mining in Mali: A Study of the Sadiola and Morila Mining Operations” (2006).

[3] Kapstein, E., Kim, R., “The Socio-economic Impact of Newmont Ghana Gold Limited” (2011).


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