Mining activities can create economic value that also generates benefits for communities by addressing challenges. Wages and benefits, taxes and royalties, procurement of goods and services, and investments in community programs and infrastructure are among the more effective ways our operations help catalyze socio-economic development in host communities. Our operations also are long term and require significant up-front investments. Unpredictable government fiscal policies create an environment that discourages additional investment, leading to mine closures and job losses. Mitigating and managing this risk requires strong governance, transparency around our payments to governments, and effective stakeholder engagement to fully demonstrate our commitment to deliver shared value.
Our standards and systems – as well as global frameworks such as the International Council on Mining and Metals’ (ICMM) Principles for Sustainable Development – support our strategy and policy by measuring our impact and driving alignment, transparency, accountability and performance throughout the business.
We commit to transparency around payments to governments consistent with the principles and objectives of Publish What You Pay – an international coalition of NGOs that advocates for open disclosure of company payments and government revenues from the extractive industry.
Government effectiveness – including regulations, laws, control of corruption, revenue management and benefit sharing – has a significant impact on our operations and our ability to translate mineral development into socio-economic advancement. Through partnerships and collaboration, we work to strengthen the governance and capacity of public institutions. Newmont has been actively involved in the Extractive Industries Transparency Initiative (EITI) since its creation in 2002. EITI is a coalition of governments, companies, investors, civil society groups and international organizations whose goal is to promote transparency regarding payments by resource companies to governments, as well as transparency on how governments allocate these revenues.
EITI aims to strengthen governance and transparency, which in turn helps build trust and a more effective use of natural resource revenues for economic and social development. As an original signatory to the EITI, we support the initiative's implementation in countries where we operate and are current members of the U.S. EITI Multi-Stakeholder Group. Among the countries where we operate, Ghana, Indonesia and Peru are EITI compliant countries; the U.S. is a candidate country; and Australia is evaluating EITI candidacy.
While we measure and report on our direct contributions – such as local employment and business opportunities and community investments and foundations – it is much harder to track how our workers and suppliers spend their wages on goods and services. However, we have commissioned renowned economists to conduct independent socio-economic impact assessments (SEIA) that show our operations can have a significant direct, indirect and induced contribution to host communities.
In addition, our payments to governments can have a cascading effect as government expenditures – such as infrastructure improvements – lead to jobs for workers, who spend money in the community, which benefits businesses that may hire additional workers, and so on.
Ongoing pressure on gold and copper prices throughout 2015 resulted in Newmont reporting lower net income compared to the previous year. This impacted our direct economic contributions associated with tax and royalty payments and our contributions to host countries through employment and community investments.
In late 2015, the government of Ghana approved a revised Investment Agreement that is designed to ensure fair and predictable fiscal arrangements that support profitable and responsible mining operations capable of delivering shared value to all stakeholders.
The first U.S. EITI report was approved by the Multi-Stakeholder Group and published in December.
During the year we published the findings from the second independent report on the socio-economic impacts of our Ahafo mine in Ghana. The study, which was conducted from 2012 to 2013 and traced the ripple effects of the mine’s spending in 2011, found that the mine’s annual expenditures of $412 million supported $360 million of value added to the Ghanaian economy and directly and indirectly supported 41,000 jobs, of which 1,900 are directly attributable to the Ahafo operation. The study also found that the Newmont Ahafo Development Foundation (NADeF) significantly amplifies the economic effect in the mine’s operating region.
In 2015, the United Nations (UN) adopted a new sustainable development agenda, which includes 17 sustainable development goals (SDG) that aim to end poverty, protect the environment and promote prosperity by 2030. The UN Development Programme (UNDP) – together with the World Economic Forum, the Columbia Center on Sustainable Investment, and the Sustainable Development Solutions Network – drafted the Atlas to map the linkages between mining and the SDGs, as public-private partnership on a global scale will be necessary to achieve these goals. The Atlas – which reflects input from mining companies including Newmont – is designed to provide a framework for mining companies and stakeholders to review current activities and their alignment with the SDGs; to support planning, resource allocation and investments; and to identify opportunities for partnerships.
Our tax payments are central to our approach to contribute to sustainable development. In 2015, our direct economic contributions totaled more than $6.05 billion, including $223.5 million in taxes and $209.6 million in government royalties. This represents a decrease from 2014 due to lower metal prices.
|Country||Operating costs||Employee wages and benefits||Payments to providers of capital||Payments to governments||Community investments||Total|
|* “Value retained” is calculated by subtracting our economic “value distributed” – operating costs, employee wages and benefits, payments to providers of capital, payments to governments and community investments – from our economic “value generated” (i.e., revenues).|
|Country||Government royalties||Taxes||Total||Percent of total|
Financial credits from governments received in 2015 totaled $100.7 million. This includes $39.2 million in Australia attributable to a diesel fuel rebate and $60.1 million in Ghana due to value added tax rebates. We also received a $96 million refund in the U.S. due to overpayment of taxes in 2008 and 2014.
The Atlas, which maps the linkages between mining companies and the sustainable development goals (SDG) of the United Nations’ sustainable development agenda, is expected to be finalized in 2016. Newmont will review and assess the Atlas to evaluate opportunities for and approaches to integrating the SDGs into our sustainability strategy, management and reporting.
We will continue to regularly engage with national and local governments, trade associations, thought leaders and other stakeholders in the countries where we operate to encourage fair policies on benefit sharing; consistent and timely permitting procedures; transparent governance; business sustainability; and sound environmental practices. For example, we will engage with the government of Suriname to explore opportunities for supporting implementation of the EITI in Suriname.