Economic contributions
Our operations can provide a strong base for the economic growth of communities, regions and countries. We focus on ensuring our presence brings sustainable socio-economic benefits to the places where we work.
Our direct economic contribution is made up of the value we add by paying wages, employee benefits, taxes and royalties and our returns to capital (dividend and interest payments and the money we retained for future investment) along with the payments we make to our suppliers.
However, our true economic contribution is far greater once the multiplier effects of our presence in an area are considered. These include the indirect effects of people spending their wages, governments distributing tax and royalty revenues, and neighbouring communities using the infrastructure developed for our operations.
- Direct economic contribution
- Indirect economic contribution
- Community contributions
Building strong regional economies and maximising community benefits requires more than just financial investments. Mitigating impacts and addressing existing disadvantage is also important.
In addition to our direct economic contributions in 2010 we managed 2,900 socio-economic programmes and spent an estimated US$166 million on communities assistance programmes and payments into benefits receiving trusts set up through directly negotiated community impact benefit agreements.
These programmes covered a wide range of activities including health, education, business development, housing, environmental protection, and agricultural development. They also enable us to work directly with our neighbouring communities and governments in varying capacities. Our aim is for these programmes to complement our primary economic contributions to ensure the development of economically sustainable local communities that can viably continue to flourish long after our operations close. You can find out more on the communities webpages.
Our operations in non OECD countries have the potential to raise gross domestic product considerably. In some cases, they can greatly increase the size of the national economy. Our economic contributions can play a role in building a broad based economy and creating jobs. Our projects and operations in non OECD countries include La Granja (Peru), QMM (Madagascar), Oyu Tolgoi (Mongolia), and Simandou (Guinea).
We are also aware that increased wealth in areas where there was previously little can have an adverse effect on inflation of goods and services. We implement inflation mitigation measures in these communities. For example at QMM in Madagascar, we developed an inflation minimisation strategy that included:
- a rice purchasing plan
- diversifying the local market by improving regional transport
- awarding catering contracts to local community gardens
- building a boarding house and temporary camp to alleviate rental inflation
