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New African Magazine - Why King Gold Has No Clothes

Section: GATA in the Press

... manipulation of the world gold market exposed!

Poor Africa: the more our miners work, the less we get

FLASHBACK: In September 1999, in our story on page 8 headlined "Gold: Deliberate Destruction", written by our assistant editor, Regina Jere Malanda, we reported:

"Plans by Western nations and the IMF to sell their gold reserves and use the proceeds to fund debt relief for poorer countries are mired in curious mendacity. By selling their gold and causing the collapse of the gold industry in Africa, the West is destroying - with impunity - the very African countries they claim to be helping.

But why are they doing this? Some critics say it is an underhand attempt to prop up the weakening Euro (the European Union common currency). Some say it is just a conspiracy - a deliberate destruction - to keep the price of gold down.

The mere discussion of the possible IMF sale and the 6 July [1999] auctioning by the Bank of England of 25 tonnes of its reserves sent the price of gold tumbling to a 20-year low. This has already cost the poor countries far more in lost export earnings than they can ever hope to receive from the sale of IMF gold. Is this the price Africa should pay for Western 'generosity'?...

As the ramifications of the sale begin to show, opposition is growing. Miners have been protesting in South Africa and Ghana amid fears of job losses. In Ghana where gold is the main foreign exchange earner (39% of exports), indications are that the Ashanti Goldfields Company may have to lay off more than 2,000 workers.

Countries that supply migrant labour will feel the strain too. For example, Mozambique has an estimated 70,000 citizens working in South African mines.

South Africa's gold industry, one of the oldest and largest in the world, is bearing the brunt... Almost 80,000 jobs are at risk. Further job losses could undermine efforts to reduce the current unemployment rate of about 30%...

`We do not believe that it [is] correct that we seek to solve one problem by creating another, which focuses on undermining our efforts at strengthening our growth and developing capabilities,' said President Thabo Mbeki, reacting to the news of the gold sales."

Now, two years on, all the pieces are falling in place. On 10 May this year, while the world was occupied with other matters, a very important conference on gold was held in Durban, South Africa. Sadly, the world media largely ignored it.

Our Durban correspondent, Pusch Commey, did attend the conference "but somehow", (God bless his heart) he "didn't file the story" because, as he now explains, he "was distracted by some pressing personal matters". The recent downbeat gold market and its disastrous impact on the economies of the African countries that produce 25% of the world's gold, prompted us to take a deeper look at the market, with the view of finding out what the problem was.

In researching the piece, we hit gold - not in the African soil but on the hard drive of Pusch Commey's computer. It was all there - the unreported story of GATA's African Gold Summit held in Durban on 10 May this year.

The conference, interestingly, had provided all the answers to the questions we were asking, which, in sum, was: why has gold been in such a sorry state over the past many years?

We have a 9-page special report here (following pages). Please sit back and treat yourself to some of the reasons why Africa, according to Tony Blair, "is a scar on the conscience of the world".

Copyright International Communications Dec 2001

Publication date: 2001-12-01