Measuring our benefit footprint

The benefit footprint is our metric for tracking the distribution of our direct economic impact. The amount is significant: in 2013, about 78% of total expenditure by our operations was spent in host countries.

When compared with total revenue from gold sales, in-country spending by operations amounted to 88% of the total value we generated as a company. This reflects operating costs as well as capitalized spending, including investment at Tasiast. The 2013 Distribution of Economic Value table shows how spending was distributed between governments, employees, and suppliers in each of our countries of operation. The value retained column shows returns to the Company; negative totals in this column indicate areas where operating and capitalized spending exceeded revenue. In aggregate, the Company made net investments in our operations in 2013. In 2013, the Company also made payments of $171.4 million to providers of capital.

In addition to tracking in-country spending, we also track spending at the local, regional, national and international levels. In this case “local” applies for suppliers registered as businesses within the appropriate “local” administrative unit (this varies by site but generally corresponds to municipality, county, or district); as “regional” within the sub-national administrative unit (generally corresponding to state or provincial level); and as “outside region” for all other spending within the host country.

The 2013 Benefit Footprint graph shows the breakdown at the sub-national levels for 2013. In aggregate, 26% of our spending was at the local level, 11% at the regional level, and 42% elsewhere within host countries. About 22% of our spending was outside host countries.

Understanding our benefit footprint helps inform our strategies for community engagement, community investment, local procurement, and recruitment. We are also working to measure the social impact of the benefit footprint. For example, sociological surveys have shown reductions in poverty and unemployment in local households around Tasiast (see case study), and a review of our community contributions at Fruta del Norte has identified several tangible results as we wind down our activities in Ecuador (see Looking Back at Kinross in Ecuador).

Contributing to Prosperity
through Foreign Investment

As a member of the Foreign Investment Advisory Council (FIAC), Kinross sponsored the development of the Study on the Impact of Foreign Direct Investment on the Socio-Economic Development of the Far East of Russia prepared by the Center for Financial and Economic Research (CEFIR) in Moscow. This study seeks to focus attention on the challenges of economic and social development in the Far Eastern Federal District (FEFD) and, in particular, to assess the role that foreign direct investment has played in creating jobs, providing tax revenues and increasing prosperity in some regions. One of the findings of this study is the significant positive impact that a relatively small number of foreign investments have had on local economies and the well-being of residents in these regions.

2013 Distribution of Economic Value 1
($ millions)
  Payments to Governments     
Royalties & Fees
Income & Corporate TaxDuties, OtherTotal to Gov’tIn-Country Suppliers 2In-Country Wages 3Community 4out-of-country SuppliersEconomic Value Retained 5
Brazil 710.1 7.0 24.2 12.4 43.6 440.9 74.0 2.9 68.2 80.5
Chile 522.4 0.0 58.5 31.3 89.8 533.1 83.0 0.4 12.9 (196.8)
Ghana 387.8 22.6 41.0 0.0 63.6 247.2 33.8 2.1 106.0 (64.9)
Mauritania 344.5 10.1 7.4 5.9 23.4 378.9 55.5 2.0 448.6 (563.9)
Russia 775.1 84.3 61.8 5.3 151.4 252.5 102.0 0.5 164.5 104.2
USA 1039.6 5.5 92.5 21.2 119.2 498.0 154.7 1.0 19.7 247.0
Corporate  0.0  0.0  0.0  0.0 0.0 49.7 217.7 6 2.3 7 30.1 (299.8)
Total 3779.5 129.5 285.4 76.1 491.0 2400.3 720.7 11.2 850.0 (693.7)
  1. In 2013, Kinross reported adjusted net earnings from  continuing operations of $321.2 million on revenue of $3,779.5 million. Operating costs were $3,285.9 million and payments to providers of capital were $171.4 million. The distribution of economic value shown above also includes capitalized expenditures of $1,187.3 million. For a complete account of Kinross’ 2013 financial performance, see our 2013 Financial Statements in the 2013 Annual Report.
  2. Suppliers registered as tax-paying businesses in the host country are considered to be in-country suppliers.
  3. In-country wages reported by country include payments made to nationals and exclude payments to expatriates (which are reported under Corporate6) . Total employee compensation, as shown in the above table, was $720.7 million.
  4. Community investments include donations and investments in non-core infrastructure.
  5. Economic value retained indicates returns to the Company; negative totals in this column indicate areas where operating and capitalized spending exceeded revenue.
  6. In this table, corporate wages include employees at corporate offices, as well as expat salaries for the Company.
  7. In this table, community investments made in 2013 at FDN are included with donations made at the corporate level.

2013 Benefit footprint

  1. Percentages shown are in relation to total expenditure by the Company.
  2. Net corporate investment is the amount spent in excess of revenue from metal sales.