Mining Contribution Index

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The 2018 Mining Contribution Index (MCI) confirms that many of the world’s most mining-dependent countries continue to rely on their natural resources as the primary driver of economic activity. This is despite continued falls in commodity prices. From the work of other organisations, such as the NRGI’s Resource Governance Index and the World Bank’s Worldwide Governance Indicators (WGI), we know that the governance of natural resources in many of these countries is weak, poor or failing.

The Mining Contribution Index (MCI) synthesises into a single number – and an associated ranking – the significance of the mining sector’s contribution to national economies.

MCI scores and rankings provide an indication of the relative importance of mining to the economic life of a country. It is not a measure of success. Whether or not a relatively high position on the Index ultimately translates into broader-based economic and social benefits depends on several factors, and quality of governance is a critical one.

This 4th edition of the MCI shows that, as with past editions, many low and middle-income economies remain dependent on the mineral sector. The data for each edition of the MCI is always from two-years prior to publication, so this year’s index relies on data from 2016, when mineral and metals prices were still in a sustained period of decline. The MCI is a composite of four indicators, each capturing different aspects of mining’s contribution to national economies:

What has changed in the 4th edition of the MCI?

The results of the 4th edition of the MCI show some big changes at the top of the ranking. While 17 of the top 25 ranked countries also featured in the top 25 in the 3rd edition (see Table 1), new entrants have made significant gains in rankings. These include Suriname (up 46 places to top the table), Namibia (up 33 places to 11th), Guinea (up 28 places to 6th), Mali (up 27 places to 3rd) and Zimbabwe (up 20 places to 19th).  Bolivia and Peru also experienced double-digit increases in their rankings.

The countries falling out of the top 25 between 2016 and 2018 comprise Ukraine and Rwanda (both down 29 places), Mozambique (down 27 places), Jamaica (down 21 places) and Chile (down 11 places). Mauritania also dropped 21 places but remains in the top 25.  All top 25 countries qualify as resource-dependent using the criteria applied in ICMM’s Social progress in mining-dependent countries report.

This underscores the dependence of low and middle-income countries on mining as and its significance in the economic life of these countries, a factor that has continued across all four editions of the MCI.

 

  Table 1. MCI ranks and scores for the top 25 countries in 2018

2018
rank

Country

2018
score

2016
rank

Difference in ranks
(2016 -2018)

1

  Suriname

96.43

47

+46

2

  Congo, Dem. Rep.

96.40

1

-1

3

  Guinea

94.28

31

+28

4

  Burkina Faso

93.45

3

-1

5

  Kyrgyz Republic

93.31

9

+4

6

  Mali

93.22

33

+27

7

  Sierra Leone

92.59

15

+8

8

  Liberia

92.08

8

0

9

  Ghana

90.94

14

+5

10

  Uzbekistan

89.13

7

-3

11

  Namibia

87.64

44

+33

12

  Madagascar

87.14

4

-8

13

  Botswana

86.13

5

-8

14

  Armenia

84.93

20

+6

15

  Tajikistan

84.90

10

-5

16

  Mongolia

84.89

21

+5

17

  Bolivia

84.46

35

+18

18

  Senegal

84.36

16

-2

19

  Zimbabwe

84.19

39

+20

20

  Guyana

80.42

6

-14

21

  Peru

80.06

37

+16

22

  Sudan

79.92

22

0

23

  Mauritania

78.59

2

-21

24

  Zambia

78.38

28

+4

25

  Dominican Republic

78.27

17

-8

Click here to download the MCI in full.

Monetary value of metals and minerals

In contrast, when countries are ranked solely on the monetary value of metals and minerals production, the top-ranking countries are dominated by upper-middle or higher-income economies (see Table 2). Only 5 other countries – Ghana, India, Indonesia, Ukraine (lower-middle income) and the Democratic Republic of the Congo (low income) – feature in the top 20 countries based on production value. The top 20 has also changed little over the past 2 years, with only the Philippines and Mozambique falling out of the top 20, replaced by Finland and Turkey (see Table 2). This again underscores the dependence of low and middle-income countries on mining, which has featured in all four editions of the MCI.

 

  Table 2. Top 20 countries ranked on production value of metallic mineral and coal

2018
rank

Country

Production value 2016 (USD bn)

2016
rank

Difference in ranks (2016-2018)

1

  China

626.3

1

0

2

  Australia

123.0

2

0

3

  Russian Federation

91.5

3

0

4

  United States

89.7

4

0

5

  India

77.0

7

2

6

  South Africa

48.9

5

-1

7

  Indonesia

47.5

10

3

8

  Canada

39.4

8

0

9

  Brazil

36.6

9

0

10

  Chile

33.5

6

-4

11

  Mexico

28.9

12

1

12

  Peru

27.1

11

-1

13

  Kazakhstan

18.6

13

0

14

  Turkey

17.2

22

8

15

  Germany

15.8

16

1

16

  Poland

14.6

15

-1

17

  Colombia

10.1

19

2

18

  Ukraine

9.9

14

-4

19

  Finland

8.5

42

23

20

  Congo, Dem. Rep.

7.9

17

-3

Click here to download the MCI in full.

What accounts for some of the major changes in MCI rankings?

Suriname has risen 46 places to top the 4th edition of the MCI. This dramatic rise is partly due to large increases in mineral rents – up from 6.3 per cent in 2014 to 24 per cent in 2016 – and in metals and minerals production value (which doubled over the two years). These combined with a significant decline in GDP (38 per cent)  between 2014 and 2016 have led Suriname to overtake countries that have historically had greater a role for mining in their national economies.

The significance of changes in GDP to a countries MCI ranking can be seen across Africa, which between 2014 and 2016 endured collectively a fall in GDP, in absolute terms, of some 15 per cent from $1.783 trillion to $1.511 trillion. A drop leading to a rise in production value and/or a rise in mineral rents as a percentage of GDP. An outcome that sees African countries dominate the top 25.

Elsewhere in the index, we have also seen some very significant changes. Almost a quarter (24 per cent) of countries in the MCI experienced a change in their ranking position of at least 20 per cent of the index (movement of 37 places or more) compared to the 3rd edition. Of these, 24 increased their position and 20 declined. The 11 biggest changes – where countries experienced either a positive improvement or a decline in their ranking of more than 30 per cent of the index (a change of 55 places or more) are as follows (see Table 3):

 

  Table 3: Countries that experienced dramatic changes in ranking

Country

MCI rank

Difference in ranks
[2016–2018]

Change in GDP
(2014-2016)

Change in export contribution (2014-2016)
(percentage points)

  Chad

49

+88

-32%

+10.6 pp

  Libya

57

+88

-22%

+16.5 pp

  Uganda

59

+79

-12%

+12.7 pp

  Somalia

107

+76

+3%

+6.0 pp

  Cambodia

108

+74

+21%

+6.8 pp

  Cameroon

51

+72

-8%

+4.2 pp

  St Lucia

93

+58

-8%

+3.8 pp

  Iraq

102

+58

-27%

+3.1 pp

  Solomon Is.

98

-57

+5%

-11.5 pp

  Tonga

171

-59

-10%

-1.6 pp

  Cyprus

134

-74

-14%

-6.1 pp

Click here to download the MCI in full.

The three biggest gainers experienced significant declines in their GDP and positive increases in mineral export contributions. However, some other gainers experienced increases in GDP. In all cases, the biggest gainers experienced positive changes in export contributions, whereas the converse was true for the four biggest losers, which saw the value of export contributions decline. If you are interested in exploring the underlying data in greater depth, please visit ICMM’s interactive data tool.

Conclusion

The 2018 MCI confirms that many of the world’s most mining-dependent countries continue to rely on their natural resources for as the primary driver of economic activity, despite continued falls in commodity prices.

From the work of organisations, such as the NRGI’s Resource Governance Index and the World Bank’s Worldwide Governance Indicators (WGI), we also know that the governance of natural resources in many of these countries is weak.

Of the top 25 countries in the 2018 MCI, the quality of governance of 21 countries (84 per cent) is rated by NRGI as weak, poor or failing and/or their average WGI scores are less than 50 per cent. Getting the framework that governs mineral resources right is therefore, increasingly important for governments to insulate their economies from vulnerability to the commodity cycle and ensure mineral wealth translates into broader-based economic and social progress.