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Tuesday, July 6, 1999 Published at 11:21 GMT 12:21 UK

World: Africa

Gold sales will cost South Africa jobs

South Africa can no longer pin its hopes on gold

By BBC Africa Correspondent Greg Barrow in Johannesburg

The South African gold mining industry is bracing itself for the impact that the sale of British gold reserves in London will have on the price of the precious metal.

The BBC's Jane Standley: "Not much light at the end of the tunnel"
Around 300,000 workers are employed in the gold mining industry in South Africa, and their earnings are estimated to support more than a million people.

The ailing industry has already been severely affected by the worldwide drop in gold prices, and mining union leaders are warning that any further fall in the price of gold could lead to tens of thousands of job losses by the end of the year.

The industry will be keeping a close watch on gold prices as the United Kingdom begins the process of selling off more than half of its gold reserves.

Fears over IMF gold sale

There is also trepidation about plans by the International Monetary Fund to sell gold to fund debt relief in the world's poorest countries.

South Africa's neighbour, Mozambique, is a potential beneficiary of the IMF plan but ironically many Mozambicans working in South Africa's gold mines could lose their jobs if the sale prompts further falls in the value of the precious metal.

One of South Africa's oldest gold mines has just announced that it is on the brink of closure, and 5,000 jobs will be lost with immediate effect.

This is happening in an industry which has already shed around 300,000 jobs in the past decade.

The old days when the South African gold industry ruled the world on the back of high global prices and cheap black labour are over, and the prospects for a revival are looking bleak.

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Internet Links

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South African Government

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Bank of England

World Gold Council

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