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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsnow who wrote (21766)	10/17/1998 1:44:00 AM
From: Alex	Read Replies (2) \| Respond to of 116764

Russian government to take control of gold industry MOSCOW -- The Russian government plans to retake control of the nation's gold industry, the world's sixth-largest producer, to boost its foreign exchange and gold reserves and help finance ailing mining companies. The government will buy almost the entire output of the Russian gold industry next year, taking 50 tons of gold in exchange for state gold certificates that mining companies will sell to finance output and buying another 50 tons for cash. The move returns control of gold exports to the government just six months after private banks in Russia had started exporting gold and helping finance the industry. In August, the government defaulted on its ruble debt and devalued the ruble, causing the banking system to collapse and leaving gold mines with few options for financing. "Big banks, hit by the crisis, don't have enough money to sort out troubles of their own, let alone the gold industry," said Dmitry Ignatiev, deputy head of the State Precious Metals Reserve. "And the central bank will just print the needed amount, and that won't be an inflationary move because this money will be backed by gold." The additional gold will allow the central bank to increase its $13.3 billion of foreign exchange and gold reserves by about $932 million, at current gold prices, which the state says will let it print money without fueling inflation. Spot gold rose as much as $3.20, or 1 percent, to $300.95 a troy ounce in London on Friday. -- Bloomberg News © Copyright 1998 Star Tribune. All rights reserved. webserv1.startribune.com