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The Socio-Economic impact of Newmont Ghana Gold Limited

The Socio-Economic impact of Newmont Ghana Gold Limited

The assignment

Sometimes mining is perceived to be an “enclave” economy. This means it is expected that there are few“ spillover” effects and that not many within the country of operation benefit from the mining operation. But is this true? To shed light on a different perspective of its activities, Newmont approached Steward Redqueen to quantify and analyze the value associated with the company’s activities in Ghana by means of rigorous academic analysis.

The result; national and local impact

In 2011, Newmont Ghana Gold Limited (NGGL) launched its socio-economic impact study of

the Ahafo mining operation in Ghana’s Brong-Ahafo region and Asutifi district. The key findings (based on NGGL’s 2009 financial data) indicated that:

  • NGGL is a major contributor to Ghana’s economy, generating nearly 10% of the nation’s total exports; 4.5% of its total foreign direct investment and 1.3% of GDP;
  • NGGL directly and indirectly supported some 48,000 jobs in Ghana;
  • NGGL played a significant developmental role in the communities around the Ahafo Mine and in 2009 alone provided 99 regional companies with nearly USD 6 million in contracts, supporting more than 400 jobs, not including direct employment.

Subsequently, several stakeholders who were involved in this study, including the President’s Office and various Ministries, the Regional Government, the Asantehene (Ashanti King), the District Chief Executives and Ghanaian civil society organizations, expressed an interest in results that not only captured the impact of the Mine on the national but also on the regional level. In our follow-up report (based on 2011 financial data) that we launched in 2013, we quantified the economic impact of NGGL’s activities on Ghana, the Brong-Ahafo region and the Asutifi district, and show that:

  • On the national level NGGL supports USD 360 million value added in terms of economic activity (0.95% of national GDP) and supports 41,000 jobs (0.39% of national labour force);
  • In Brong-Ahafo NGGL supports USD 31 million value added (0.78% of regional GDP), of which USD 15 million is directly attributable to NGGL (0.38% of regional GDP) and supports 8,700 jobs (0.86% of the regional labor force).;
  • In Asutifi district NGGL supports approximately 8% of the district’s (estimated) GDP and 10% of (estimated) employment. The Newmont Ahafo Development Foundation (NADeF) amplifies this economic effect with another 23% in terms of value added.

The benefits

Newmont appreciated these insight. But also its stakeholders such as government authorities, local chiefs and communities valued the findings. The stakeholders appreciated Newmont’s transparency and were pleased to see what part of economic benefits remain within the region.

Read the 2011 impact report here

Read the 2013 impact report here