Ghana, South Africa to join Africa delegation against gold sales

Accra (Greater Accra) 19 July '99

Ghanaian and South African Ministers of Mines, Minerals and Energy have resolved to participate in a broad African delegation to the United Kingdom (UK), Europe and United States to seek a moratorium on gold sales by the British government and the International Monetary Fund (IMF).

This is contained in a joint communiqué signed by Mr Fred Ohene-Kena, Minister of Mines and Energy and Ms Susan Shabangu, South African Deputy Minister of Minerals and Energy after a day's meeting on the impact of the British and IMF gold sales.

Officials from the Minerals Commission of Ghana, Ghana Chamber of Mines, Ghana Mineworkers Union, Chamber of Mines of South Africa and the National Union of Mineworkers of South Africa attended the meeting.

The meeting agreed that there was the need to work together for a strong collective approach to the intended sale of gold by the IMF, UK and other Central Banks in Europe.

The communiqué said the two ministers agreed that the sales are harmful to Africa.

In Ghana, 2,500 workers in two mines are in the process of being laid off with several jobs threatened should the low price continue.

In South Africa 11,700 jobs involving six mines have been lost and should the current price remain, 80,000 workers stand the risk of job losses.

The price of gold has plummeted to its lowest in 20 years following British sale of 25 tonnes of gold, the first of an intended 450 tonnes of 750 tonnes of gold reserves.

The IMF last month proposed the sale of 10 million ounces of gold to provide a fund for highly indebted poor countries.

The price of the commodity, which was at 261 dollars an ounce dropped to 255 dollars when the British sales started last week, a figure far below the 278 dollars an ounce at the beginning of the year.

The communiqué said mines stand closure while residual mineral pockets have the potential of severely damaging the environment.

"In the light of the experience with the UK gold sales, the ministers agreed that the IMF gold sales to fund highly indebted poor countries (HIPC) initiative should be suspended and other options be found."

It noted that of the 41 identified HIPCs 34 are in Africa with 30 of them being gold producers.

"While the parties strongly support the IMF initiative, they agreed that other alternatives to funding should be sought."