G-khan
03-27-2003, 10:47 PM
By: Tim Wood
Posted: 2003/03/27 Thu 09:00 EST | © Mineweb 1997-2003
NEW YORK -- 2003 will be a watershed year for South African gold producers. For the first time in two decades, the rand is a stiff breeze from the front rather than the helpful tailwind that masked cost pressures and a somnambulant gold price. The mines appear to have left themselves exposed by failing to hedge SA’s appreciated currency.
When currency, interest rate and commodity winds shifted in late 2001, few could have forseen the dramatic – capricious even – impact on SA’s gold industry.
First, the gold price lifted its head as an antidote to the global investment bubble being punctured. Then the September 11 atrocities added insecurity to help fill gold’s sails more fully than at any time since 1994. Lastly, the rand collapsed during SA’s 2001 summer holidays.
The confluence and combination was spectacular. Rand-per-kilogram prices, the metric that drives the gold business in SA, soared to nearly R120,000 just before Christmas of that year, a 79% increase in just one year even though gold had only risen 1.6% over the same period.
http://m1.mny.co.za/mgan.nsf/Current/85256C3300290CD485256CF6004F6190?OpenDocument
Posted: 2003/03/27 Thu 09:00 EST | © Mineweb 1997-2003
NEW YORK -- 2003 will be a watershed year for South African gold producers. For the first time in two decades, the rand is a stiff breeze from the front rather than the helpful tailwind that masked cost pressures and a somnambulant gold price. The mines appear to have left themselves exposed by failing to hedge SA’s appreciated currency.
When currency, interest rate and commodity winds shifted in late 2001, few could have forseen the dramatic – capricious even – impact on SA’s gold industry.
First, the gold price lifted its head as an antidote to the global investment bubble being punctured. Then the September 11 atrocities added insecurity to help fill gold’s sails more fully than at any time since 1994. Lastly, the rand collapsed during SA’s 2001 summer holidays.
The confluence and combination was spectacular. Rand-per-kilogram prices, the metric that drives the gold business in SA, soared to nearly R120,000 just before Christmas of that year, a 79% increase in just one year even though gold had only risen 1.6% over the same period.
http://m1.mny.co.za/mgan.nsf/Current/85256C3300290CD485256CF6004F6190?OpenDocument