By Andrew Davidson South Africa Business Report July 25, 2001 http://www.businessreport.co.za Johannesburg -- Kelvin Williams, the marketing director of AngloGold, the world's biggest gold producer, yesterday slammed the vast majority of global gold mining companies for not taking responsibility for the promotion of their product and doing "nothing whatsoever" to grow or maintain the health of the gold market. Instead they were riding on the backs of those who coughed up millions of dollars each year to support and promote the industry. Williams disclosed that only 30 percent of gold producers supported the World Gold Council (WGC), a non-profit body set up 14 years ago to "simulate and maximise" the demand and holding of gold by consumers, investors, industry, and the official sector (central banks). AngloGold, which has an output of about 7 million ounces of gold a year, pays a membership fee of $13 million a year, or $2 for each ounce produced. South Africa's second largest gold miner, Gold Fields, with an annual output of about 4 million ounces, is also a fully paid up member of the WGC, as are Harmony, Avgold and JCI. Among local gold companies that do not contribute is Durban Roodepoort Deep. There has been much hype about the WGC spending $55 million this year to "reawaken" interest in gold through an intensive marketing, advertising, and public relations campaign. But Williams said this compared with $200 million spent each year by diamond group De Beers during the last decade, and aimed at a smaller market. Williams said that during the past 10 years the WGC's annual budget had fluctuated from $70 million at its peak to $30 million. "We think there are many gold mining companies which recognise the importance of maintaining a healthy physical market for gold and benefit from that market being there always to take their product. "But unfortunately there is a large number of gold producers who take no responsibility for the marketing of their product and who have over a number of years done nothing whatsoever to grow that market or maintain the health of that market," said Williams. Many of them, he said, "hide behind spurious reasons". One large producer, he said, wanted a guarantee that central banks would not sell more gold. Others refused to join the WGC in protest at some of the members' hedging positions. Williams, who masterminds AngloGold's hedging programmes, which have saved his group millions of rands, is convinced that hedging does not have a significant influence on the gold price. AngloGold, through Williams, will spend about $3 million in marketing its product this year in addition to the WGC contribution. Williams admitted that today there were few new markets for gold, with even the once precious metal hoarding Japanese keeping their yen in their pockets. In other less developed countries more people are buying cellular phones and trendy sports shoes in preference to gold jewellery. The jewellery industry, however, still remains the biggest customer of gold, taking about 81 percent of the 4,000 tons of annual demand. About 2 550 tons of gold will be produced this year, so the residue has to come from sales and scrap. Williams said the main thrust for marketers was to sustain the healthy demand for gold in the established markets of developed countries. But they were constantly on the lookout for other potential, deregulated markets. Thailand has started to offer that potential, but the big carrot for gold producers is likely to be China with its burgeoning economy and strong indications that it will deregulate its gold market next year. -END- ------------------------ Yahoo! Groups Sponsor ---------------------~--> <FONT COLOR="#000099">Small business owners... Tell us what you think! </FONT><A HREF="http://us.click.yahoo.com/vO1FAB/txzCAA/ySSFAA/WfTolB/TM";><B>Click Here!</B></A> ---------------------------------------------------------------------~-> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
