Despite falling commodity prices, many of the world’s poorest countries have become more dependent on their income from mining, new research published by the International Council on Mining and Metals (ICMM) has found.
The ICMM on Thursday released the fourth edition of its Mining Contribution Index (MCI), which ranks 182 countries according to the relative economic importance of mining to their economies. The latest edition confirms that, between 2014 and 2016, many of the world’s most mineral-dependent countries became even more dependent on the economic contribution of mining, despite falls in commodity prices over this period.
“This research shows the importance of getting the framework that governs mineral resources right if governments are to ensure that mineral wealth translates into broader-based economic and social progress.
“It also shows the need to diversify and invest in other areas to insulate their economies from vulnerability to the commodity cycle” ICMM COO Aidan Davy commented.
The MCI combines data on mining’s contribution to countries’ gross domestic product (GDP), export earnings and mineral rents that are paid to host governments. It indicates the importance of mining in the economic life of a country and the potential for this to translate into economic and social progress.
The data shows that Suriname has risen 46 places to top the MCI. Major factors in this were doubling of metals and minerals production value since the last index combined with a 38% drop in GDP. The drop in GDP has the effect of significantly increasing the components of the index that are referenced as a percentage of GDP.
The three biggest gainers similarly experienced significant declines in their GDP and positive increases in mineral export contributions.
Fifteen of the top 25 ranked countries are African. The GDP at purchasing power parity (PPP) per capita for Africa was stable between 2014 and 2016; however, in absolute terms, it dropped from $1.78-trillion to $1.51-trillion in 2016.
This has contributed to a significant rise in several countries' production value and or mineral rents as a percentage of GDP, which has a bearing on African countries dominating the top 25.
The ICMM states that this year’s top 25 is dominated by low and middle-income economies since the departure of Australia and Chile, showing the significance of mining in the economic life of these countries, a trend that has continued across all four editions of the MCI.