Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Medinah Mining Inc. (MDHM) -- Ignore unavailable to you. Want to Upgrade?

To: Coz who wrote (15843)	6/21/1999 3:00:00 PM
From: SSP	Read Replies (1) \| Respond to of 25548

JOHANNESBURG (AFX) - Plans by the IMF to sell 10 pct of its gold reserves to assist debt relief among the world's poorest countries is likely to do more harm than good in Africa, the World Gold Council said. The WGC, which groups the world's major mining companies, said the recent fall in the price of gold "as a direct consequence of the plans of the IMF, Switzerland and the UK to sell gold" has lost developing nations more than 150 mln usd in annual export earnings. "This is more than they stand to gain from the IMF's sale of 10 pct of its gold reserves," Gary Mead, the WGC's head of research, told a press conference here. "Selling IMF gold may well do more harm than good and is certainly not vital for HIPC (heavily indebted poor countries) debt relief," he said, referring to the results of a study conducted by economists on behalf of the WGC. The study, "A Glittering Future", focuses on sub-saharan Africa countries, where, of the 41 HIBCs, more than 30 are gold producers or pootential gold producers. In nine of the countries, Mead said, gold accounts for at least five pct of export revenues and in two, for more than 30 pct. While for many countries the gold mining industries are still in embryonic form, bullion represents 35 pct of exports in countries such as Ghana and Mali, 20 pct in Tanzania and seven pct in Burkina Faso. According to the WGC, gold exports amounted to 6.8 bln usd in sub-Saharan Africa in 1997, 7.8 pct of total exports from the region. Not including South Africa, Mead said, gold producing countries have collectively lost between 150 mln and 200 mln usd a year in export earnings as a result of the 30 dollar an ounce drop in the price of bullion since May 7. If South Africa, the world's largest gold producer, is included, the loss is closer to 600 mln usd a year. Mead said some of debt-ridden countries were under the misapprehension that they would share in the total proceeds of the IMF's sale of 321 tonnes of gold. "In fact," he Mead," the proceeds are to be re-invested in different accounts like U.S. Government Treasury Bonds and only the interest will go to debt relief." This, he added, could result in HIPCs getting back much less than they would have earned from their gold production. Siding with the WGC is Bobby Godsell, president of the South African Chamber of Mines, who said the idea of funding debt relief through the sale of IMF gold reserves is "perverse" and will have "disastrous effects." Godsell, also chief executive of Anglogold, the world's biggest gold producer, has headed for Washington, accompanied by James Motlatsi, president of South Africa's National Union of Mineworkers, to lobby support in the U.S. Congress against the proposed IMF gold sales. Godsell and Motlatsi said in a joint statement here that if the price of gold remains at its current level of around 258 usd an ounce, 40 pct of the country's gold production will become unprofitable and more than 80,000 people will face losing their jobs. "If the sale of IMF gold causes a further 30 dollar drop in the price, another 100,000 people in southern Africa will become unemployed, and the million people dependent on them will be plunged into poverty," the statement said.