- Contributions to Local Economies
- Local Employment
- Local Expenditure
- Contributions to Indigenous Communities
- Contributions to Community Development
- Education and Pre-Employment Training
- Local Business Development
- Community Health and Safety Awareness
- Sponsorships and Donations
Contributions to Local Economies
Mining operations, by their nature, are in remote parts of the country which means that the investment and employment opportunities generated by these operations have a significant impact on the economic activity in the region.
It is important to OZ Minerals that the local communities share in the benefits that our operations may bring to an area and that these communities understand the contribution the company makes to the places it operates. However, mines generally have a prescribed life and so it is equally important to the company that when we eventually do leave an area, we leave the local community in a stronger economic position than when we arrived.
To this end, in addition to the economic flown-on effects of employment opportunities and capital and operational spending, OZ Minerals actively seeks to contribute to local community development. This investment is targeted to generate long term and sustainable benefits for the local region in areas such as business development, education and training and health and safety.
In Australia our operations in Queensland, South Australia, Tasmania and Western Australia also make significant contributions to regional, state and national economies. It is anticipated that our Prominent Hill operation, which was commissioned in early 2009, will contribute over $500 million per annum to the gross state product (GSP) of South Australia. During development of the project over $310 million, 28 per cent of the total capital expenditure of $1,100 million was spent on goods and services within South Australia.
In South-East Asia the minerals industry has an opportunity to contribute to the development of some of the world’s less developed countries. Our Sepon operation continued to make a significant contribution to the macroeconomic stability and growth of Lao PDR during 2008, the details of which are outlined in the case study below.
The total monetary value of OZ Minerals’ contributions to Australian and Asian economies is provided in the Economic Value Generated and Distributed Table below.
Macroeconomic Benefits of Sepon Operation
Sepon copper cathodes prepared for shipment
Our Sepon operation continued to make a significant contribution to the macroeconomic stability and growth of the Lao PDR during 2008
The International Monetary Fund (IMF) estimates for 2008 placed mining's contribution to the Lao PDR gross domestic product (GDP) at 5.3 per cent of the total, of which Sepon represents over 4 per cent. Multiplier effects mean the operations’ actual contribution may be 1.5 times higher than each of these figures. Research commissioned by OZ Minerals and conducted by the Centre for International Economics (CIE), Canberra, indicates Sepon contributes up to 18 per cent of the Lao GDP, including 4.5 per cent directly and 13.5 per cent indirectly. In the 2007/2008 financial year Sepon was the biggest taxpayer in the Lao PDR, contributing US$136 million to consolidated revenue in taxes or over 12 per cent of total tax revenue.
Of the total benefits generated by the operation, between 50 and 55 per cent are retained within the Lao PDR. While the boost to the country’s foreign exchange earnings provided by the operation helped keep the Lao kip stable throughout 2008, government management of additional Sepon revenues has to date restrained any tendency for the Lao economy to show signs of what is commonly referred to as the ‘resource curse’; spending has been prudent and inflation rates remain modest. The World Bank has observed that government spending in recent years has significantly increased in the areas of health and education, which suggests that mining's contributions are being invested in human development. Overall mining revenues are equivalent to 75 per cent of total national expenditure on health and education.
Sepon's workforce makes up a significant percentage of the national non-agricultural workforce and its revenue streams have led to an increase in national reserves, a balance in exports and imports rarely ever before experienced in the country, and created greater economic stability. Locally, in six villages and towns close to the operation, annual per capita incomes have risen from US$64 in early 2001, to US$500 in late 2005 and to over US$800 in late 2007.