Canadian mining investment overseas has a direct positive economic impact on host countries and communities. It’s estimated that 80% of all money spent in building and operating a mine is spent in the host country through wages, local business procurement and payments to various levels of government.
This estimate is supported by research conducted annually by MAC. Using methodology developed by the World Gold Council, MAC surveys its members expenditures related to mining activities outside of Canada. The purpose of this study was to better understand the Canadian mining sector’s overall contributions to economic development around the world, beyond focusing exclusively on taxes and royalties.
Eight MAC member companies – representing 38 producing operations and 23 non-producing operations – and employing 70,500 employees and contractors – provided information in 2017 on their expenditures related to employee salaries, payments to suppliers, community investment, taxes and royalties, and payments to providers of capital. The data provided by these 61 operations reveal that the majority of expenditures associated with mining activities are spent in host countries.
- The reported expenditures totalled US$14.3 billion, with US$13 billion (91%) being spent in the host country.
- The largest beneficiaries within host countries are companies that supply equipment and services to mining operations, accounting for 37% of the total.
- The second largest beneficiaries are payments to employees, accounting for 11% of the total, followed by combined payments to governments and communities accounting for 9% of the total.
Local Procurement and the Sustainable Development Goals
The positive economic impacts created when Canadian mining companies procure goods and services in their host countries and communities can be game-changers for economic and social development. While civil society and the public at large have tended to focus heavily on the level of tax paid by mining companies, procurement is the single-largest payment type a mining operation will make over its lifespan.
Therefore, recognition of the role that local procurement can play in helping to achieve Sustainable Development Goals (SDGs) is increasing. As discussed in the joint report, Mapping Mining to the Sustainable Development Goals: An Atlas, local procurement can contribute meaningfully to a number of SDGs as shown below.