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Productivity Trends in the Gold Mining Industry in Canada

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  • Jeremy Smith

    ()

Abstract

The purpose of this report is to uncover the factors behind what has been, on average, a strong productivity performance from the Canadian gold mining industry over the past four decades. It is found that real price movements have had a substantial impact on productivity growth in the gold mining industry in Canada. The real price of gold declined steadily throughout the 1990s, squeezing the profits of mines on sites of marginal quality and thereby leading to the closure of the least productive gold mines. This had the effect of increasing the average productivity of the overall industry. The report also finds evidence that the gold mining industry in Canada was not in good health towards the end of the 1970s, despite the record gold prices of this period. Real gold mining output decreased sharply and steadily throughout the 1960s and 1970s, despite massive capital accumulation. This situation was reversed in the 1980s, with new discoveries of gold, and strong productivity growth driven by technological and organizational improvements. As these observations suggest, the productivity performance of the Canadian gold mining industry has been markedly different from decade to decade. The 1960s and 1970s witnessed productivity stagnation followed by sharp declines, but the 1980s and 1990s saw gold mining productivity growth exceeding that at the total economy level by a wide margin. Overall, the productivity gains of the past two decades have more than offset the earlier poor performance, so that the average productivity record of the gold mining industry over the past four decades remains strong.

Suggested Citation

  • Jeremy Smith, 2004. "Productivity Trends in the Gold Mining Industry in Canada," CSLS Research Reports 2004-08, Centre for the Study of Living Standards.
  • Handle: RePEc:sls:resrep:0408
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    File URL: http://www.csls.ca/reports/csls2004-08.pdf
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    References listed on IDEAS

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    1. Tilton, John E., 2001. "Labor productivity, costs, and mine survival during a recession," Resources Policy, Elsevier, vol. 27(2), pages 107-117, June.
    2. Centre for the Study of Living Standards, 2004. "Report on Productivity Trends in Selected Natural Resource Industries in Canada," CSLS Research Reports 2004-06, Centre for the Study of Living Standards.
    3. Garcia, Patricio & Knights, Peter F. & Tilton, John E., 2001. "Labor productivity and comparative advantage in mining:: the copper industry in Chile," Resources Policy, Elsevier, vol. 27(2), pages 97-105, June.
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    5. Asafu-Adjaye, J. & Mahadevan, R., 2003. "How cost efficient are Australia's mining industries?," Energy Economics, Elsevier, vol. 25(4), pages 315-329, July.
    6. Tilton, John & Landsberg, Hans, 1997. "Innovation, Productivity Growth, and the Survival of the U.S. Copper Industry," Discussion Papers dp-97-41, Resources For the Future.
    7. Centre for the Study of Living Standards, 2003. "Productivity Trends in Natural Resources Industries in Canada," CSLS Research Reports 2003-01, Centre for the Study of Living Standards.
    8. Kissell, Fred N, 2000. "Insights on Technology Transfer from the Bureau of Mines," The Journal of Technology Transfer, Springer, vol. 25(1), pages 5-8, March.
    9. Paul M. Romer, 1987. "Crazy Explanations for the Productivity Slowdown," NBER Chapters,in: NBER Macroeconomics Annual 1987, Volume 2, pages 163-210 National Bureau of Economic Research, Inc.
    10. B Shebeb, 2002. "Productivity Growth and Capacity Utilization in the Australian Gold Mining Industry: A Short-Run Cost Analysis," Economic Issues Journal Articles, Economic Issues, vol. 7(2), pages 71-82, September.
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    More about this item

    Keywords

    Gold Mining; Gold Industry; Mining; Mining Industry; Canada; Productivity; Productivity Growth;

    JEL classification:

    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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