Unearthing Wealth: The Economic Impact of ASGM Outpaces that of other Commodities
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Most artisanal gold mining occurs in remote locations with few official economic prospects.[1] Therefore, the money made from gold mining can have a big effect on local economies and cause a big shift in wealth within these communities.
Gold is a commonly traded global asset that is frequently seen as a safe haven.[2] Gold price fluctuations have the potential to significantly redistribute wealth across market participants, especially artisanal miners who stand to gain from higher prices.
Do you know that:
1. Gold price is relatively high compared to other commodities.
When compared to many other commodities, gold usually has a high value per unit of weight. Accordingly, the extraction and selling of gold can provide substantial income for even small-scale artisanal miners.
2. Artisanal gold mining is a big contributor to reducing unemployment.
The number of people (directly and indirectly) involved in ASGM, smallholder cocoa farming, palm oil plantation, and cotton cultivation is shown below.
In the informal sector, where transactions might not be tracked down or governed by laws, artisanal gold mining frequently takes place. This can make it easier for miners, purchasers, and local communities to transfer money directly to one another without official control.
Gold supply chains can be convoluted and involve several middlemen, particularly when the gold is extracted artisanally. Wealth may be moved because of this at several points in the supply chain, from miners to traders, processors, and finally consumers.
3. Artisanal gold mining is a big contributor to the global economy
4. Gold is highly fungible compared to other commodities.
When compared to many other commodities, gold is very fungible[15]. The capacity of an asset or commodity to be readily swapped or replaced with another unit of the same asset or commodity of equal value is referred to as fungibility[16]. We recognize that Gold is a precious metal and operates in different markets with distinct characteristics compared to agricultural products. For illustration purposes, the fungibility of gold to palm oil, cotton, and cocoa, and the uniqueness of gold are shown here below.
5. The value of gold captured by artisanal gold miners is high compared to other commodities.
6. Artisanal gold miners' daily earnings are high compared to other commodities.
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