UNIONS SLAM GOLD SALE (fwd)

[Robert Weissman <rob@essential.org>]

ICEM UPDATE

No. 40/1999

6 July 1999

The following is from the International Federation of Chemical, Energy,
Mine and General Workers' Unions (ICEM):

GOLD SLUMP: 100,00O AFRICAN MINERS AT RISK

MINERS' INTERNATIONAL SLAMS BRITISH SELL-OFF AND IMF SCHEME

SOUTH AFRICAN MINERS MARCH ON BRITISH EMBASSY TOMORROW

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 dollars 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 dollars 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, EPRM, 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
dollars, but the poor countries owe some 220 billion dollars. 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, instead of 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."
   
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