Purpose:

The group intends to:

(a) play a leading role in developing methodological and practical guidelines and recommendations by pooling best theoretical and methodological practices, in order to rationally track mining industry activities and accurately measure the industry’s contribution to the economy and its impact on other social sectors and the environment;

(b) serve as a forum for sharing the expertise of national and international statistical organizations and other interested parties;

(c) collaborate with the United Nations and the specialized agencies on developing and improving statistical methodologies and standards for statistics on natural resources and provide support in this area;

(d) develop practical manuals and recommendations based on best practices that ensure coverage, reliability, accuracy and relevance of statistical data to support the efforts made by countries with large mining sectors to implement the System of National Accounts 2008, the System of Environmental-Economic Accounting and the revised Framework for the Development of Environmental Statistics.

Year organized: 2012

Participants: To be decided

Meetings:

The first meeting of the city group is intended to be held in August, 2012, in Ulaanbaatar, Mongolia.

Topics considered:

(a) The impact of the mining industry on a country’s economy should be articulated and analyzed. In addition to carrying out their main activities, mining enterprises also engage in the development of infrastructure, including roads, transportation and communications, as well as the service sector. Some of these activities are not currently classified under the mining sector. An assessment of the contribution made by the mining sector could include these indirect contributions;

(b) The mining sector plays an important role in total production and the unit price of mining products could affect the assessment of the contribution to the national economy. The price of mining products often fluctuates significantly, influencing estimates of the gross domestic product (GDP) at current and constant prices. Therefore, a methodological assessment should be carried out on the impact of price volatility;

(c) Considering that investment is one of the components of GDP estimates, the issue of how to accurately estimate foreign direct investment should also be addressed. There is an urgent need to define an efficient methodology for collecting data on the capital expenditure of mining industries and for information on foreign direct investment for foreign investors;

(d) Indicators for assessing the actual gains made from investment need to be identified;

(e) Methodologies and recommendations for determining the size of the informal mining sector are needed. Due to the specific nature of the mining industry, workers engaged in the informal mining sector are likely to be constantly migrating, moving from site to site, which could limit their capture in household surveys. As already mentioned, the price of mining products in the formal sector is high, and the cost of such products in the informal sector, within which mining represents a large share, is also estimated to be large. Therefore, the issue of how to calculate the economic contribution of the informal mining sector should be addressed;

(f) Some mining products are being handled by a single company, which raises the issue of how data confidentiality should be addressed;

(g) The issue of the classification and identification of activities of transnational companies for the accurate estimation of GDP and associated income flows could also be addressed;

(h) An additional issue that could be addressed is that of the enormous impact of the mining sector on the social sectors. Measuring the influence derived from the benefits arising from and the income generated by the mining sector on the living standards (conditions, nominal and real income) and poverty profile of the population is important. The spillover effects of the mining industry should be identified and studied.

Products: To be decided

Planned activities:

(a) Assess the impact of the mining industry on economies and develop methodological guidelines and practical recommendations on how to demonstrate the impact in official statistics;

(b) Develop methodologies and indicators for measuring the benefits provided by and the influence exerted over other social sectors by the mining industry;

(c) Develop practical recommendations for measuring and identifying the impact of the mining industry on the environment;

(d) Develop a system of standard indicators for data collection.