MAC/20: Mines and Communities

Dilemmas and debates - for the industry

Published by MAC on 2001-05-01


Dilemmas and debates - for the industry

Can any conclusions be drawn which answer the questions posed above (and others)?

Whether gold is mined or left in the ground is subject to a number of different economic and political criteria. These are sometimes contradictory. For example, the "hedging" and forward selling of gold is based largely on the value of "assets" which have not yet been mined (and may never be): waiting for that value to increase through market manipulations can be a key ploy in raising finance on the part of mining companies. Yet, some companies have decided to increase the exploitation of their reserves, even while the price teeters at its lowest level for 17 years. Two years ago, as the gold industry contemplated the prospect of a collapse in confidence in the world's most reliable and durable metal, some of its adherents began arguing that gold should no longer be viewed as an exchangeable commodity but regain its previous position as a hard currency.

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