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14 July, 2005ICEM News Release No. 40/1999
Some 100,000 African miners face unemployment and desperate poverty if gold prices stay at their present 20-year low.
Gold slid to around $261 an ounce today after Britain sold 25 tonnes at $261.20 an ounce in an auction that was 5.2 times oversubscribed. Renewed pressure could come from further big sell-offs, notably a plan by the International Monetary Fund (IMF) to cut its gold reserves by up to 10 million ounces.
"If the price of gold stays around $260 an ounce or less, this spells the loss of up to 82,000 miners' jobs in South Africa and more than 100,000 in sub-Saharan Africa as a whole," miners' leader James Motlatsi told ICEM UPDATE from Johannesburg this afternoon.
"If you take the indirect effects into account," he pointed out, "this means that more than a million Africans will suffer deeply as a result of these gold sales. Many more miners' jobs will also be put at risk on other continents."
The world's biggest gold producer, South Africa currently has some 300,000 miners. Unemployment in South Africa as a whole is already around 30 percent.
Motlatsi is President of the country's National Union of Miners (NUM) and Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM), to which the NUM is affiliated at the global level. He also chairs the ICEM's African region.
"We are very disappointed that the British government went ahead with the gold sale today and that they are apparently determined to continue these sales," Motlatsi said.
"Through this policy, they are doing great harm to many of the world's indebted and poor countries. For one-third of the highly indebted countries, gold mining is an important currency earner. We cannot believe that the British government has thought this policy through properly, and we appeal to the British to reconsider.
"One major South African mining company, ERPM, already announced 5,000 job losses yesterday," Motlatsi added. "Tomorrow, we will be taking those 5,000 miners to the British embassy in Pretoria, to show the British authorities what suffering they are causing."
The British attitude was in marked contrast to the line taken by a number of other national reserve banks, Motlatsi stated. Last month, he said, he was on a delegation from South Africa's Chamber of Mines which lobbied the heads of reserve banks and legislators in a number of key countries. "The central reserve banks of the US, Germany, France, Italy and some other countries promised us that they would not be selling off their gold reserves," Motlatsi said. "This makes the British action all the more incomprehensible."
The Chamber of Mines delegation also found considerable opposition amongst US legislators to the idea of selling IMF gold reserves, Motlatsi said. The US is the IMF's biggest contributor and voter.
The declared rationale behind the IMF gold sell-off is that it would finance debt relief for the world's poorer nations.
"It's ridiculous for the IMF to suggest that selling 10 million ounces of gold would make a significant contribution to writing off third world debt," Motlatsi countered. "That sale would raise about $2.6 billion, but the poor countries owe some $220 billion. And in the meantime, the IMF sale, by pushing down the gold price, would further reduce the earnings of some of the world's poorer nations.
"Instead," Motlatsi insisted, "the IMF should assist the poorer countries by meeting their needs case by case, rather than imposing its discredited structural adjustment policies on them. And the rich countries should simply write off what the poor countries owe them. That is what South Africa did, after the end of apartheid, with the debts owed to us by Mozambique and Namibia. We are not a rich country. If we can do it, others can too."
"The British gold sale and the proposed sale by the IMF are irresponsible," agreed ICEM General Secretary Vic Thorpe in Brussels. "The ICEM calls upon both of them not to dump any more gold on to the market. What is needed urgently is a world gold summit, at which any changes in the role of gold can be properly planned. In that way, governments can ensure that such changes cause minimum disruption to the earnings of some of the world's poorest countries and some of the world's least privileged workers.
"The British government has made much of its ethical foreign policy," Thorpe added. "The ICEM will be pressing it to put its gold where its mouth is. As for the IMF, it is perfectly well aware that debt can be written off without selling gold stocks. We should all be telling the IMF what it knows already: you don't have to sell gold to do good."
Gold slid to around $261 an ounce today after Britain sold 25 tonnes at $261.20 an ounce in an auction that was 5.2 times oversubscribed. Renewed pressure could come from further big sell-offs, notably a plan by the International Monetary Fund (IMF) to cut its gold reserves by up to 10 million ounces.
"If the price of gold stays around $260 an ounce or less, this spells the loss of up to 82,000 miners' jobs in South Africa and more than 100,000 in sub-Saharan Africa as a whole," miners' leader James Motlatsi told ICEM UPDATE from Johannesburg this afternoon.
"If you take the indirect effects into account," he pointed out, "this means that more than a million Africans will suffer deeply as a result of these gold sales. Many more miners' jobs will also be put at risk on other continents."
The world's biggest gold producer, South Africa currently has some 300,000 miners. Unemployment in South Africa as a whole is already around 30 percent.
Motlatsi is President of the country's National Union of Miners (NUM) and Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM), to which the NUM is affiliated at the global level. He also chairs the ICEM's African region.
"We are very disappointed that the British government went ahead with the gold sale today and that they are apparently determined to continue these sales," Motlatsi said.
"Through this policy, they are doing great harm to many of the world's indebted and poor countries. For one-third of the highly indebted countries, gold mining is an important currency earner. We cannot believe that the British government has thought this policy through properly, and we appeal to the British to reconsider.
"One major South African mining company, ERPM, already announced 5,000 job losses yesterday," Motlatsi added. "Tomorrow, we will be taking those 5,000 miners to the British embassy in Pretoria, to show the British authorities what suffering they are causing."
The British attitude was in marked contrast to the line taken by a number of other national reserve banks, Motlatsi stated. Last month, he said, he was on a delegation from South Africa's Chamber of Mines which lobbied the heads of reserve banks and legislators in a number of key countries. "The central reserve banks of the US, Germany, France, Italy and some other countries promised us that they would not be selling off their gold reserves," Motlatsi said. "This makes the British action all the more incomprehensible."
The Chamber of Mines delegation also found considerable opposition amongst US legislators to the idea of selling IMF gold reserves, Motlatsi said. The US is the IMF's biggest contributor and voter.
The declared rationale behind the IMF gold sell-off is that it would finance debt relief for the world's poorer nations.
"It's ridiculous for the IMF to suggest that selling 10 million ounces of gold would make a significant contribution to writing off third world debt," Motlatsi countered. "That sale would raise about $2.6 billion, but the poor countries owe some $220 billion. And in the meantime, the IMF sale, by pushing down the gold price, would further reduce the earnings of some of the world's poorer nations.
"Instead," Motlatsi insisted, "the IMF should assist the poorer countries by meeting their needs case by case, rather than imposing its discredited structural adjustment policies on them. And the rich countries should simply write off what the poor countries owe them. That is what South Africa did, after the end of apartheid, with the debts owed to us by Mozambique and Namibia. We are not a rich country. If we can do it, others can too."
"The British gold sale and the proposed sale by the IMF are irresponsible," agreed ICEM General Secretary Vic Thorpe in Brussels. "The ICEM calls upon both of them not to dump any more gold on to the market. What is needed urgently is a world gold summit, at which any changes in the role of gold can be properly planned. In that way, governments can ensure that such changes cause minimum disruption to the earnings of some of the world's poorest countries and some of the world's least privileged workers.
"The British government has made much of its ethical foreign policy," Thorpe added. "The ICEM will be pressing it to put its gold where its mouth is. As for the IMF, it is perfectly well aware that debt can be written off without selling gold stocks. We should all be telling the IMF what it knows already: you don't have to sell gold to do good."