Challenges in the Era of Globalization - iaabd

Abstract:
Study on Africa Government Regulation on Gold Market
Ju Yang alfjy@hotmail.com
Shanghai Institute of Foreign Trade, Shanghai 201620, China
William X. Wei
School of Business, Grand MacEwan University, Alberta, Canada
Challenges in the Era of Globalization
Edited by Emmanuel Obuah
Hongzhou Geng
Market Operation Regulation Bureau, Ministry of Commerce, Beijing, 100037, China.
This paper gives a review of the government regulation and policy changes on gold and gold markets in the major
gold producer and consumer countries. It proposes that with a large amount of spot gold in produce, Africa should
push in the development of spot gold market in full sail, expand the future gold market with cautiousness and
stability and increase gold reserve in good time. In the end, it puts forward the general effective strategies and
methods of the government regulation on the gold market in Africa.
Introduction
Africa is a major gold producer in the world, and it used to produce up to 60% of the global production.
South Africa is one of the global leaders in gold production. In 1970 South Africa produced over
32Moz of gold, 2/3 of the world's production (47.5Moz). Coupled with the labor problems, lowering
grades as well as several mines reaching the end of their lives, South Africa’s gold production has been
declining steadily. In 2000, the world production hit 2,573mt (82.6Moz), but South Africa only produced
428mt (13.8Moz) accounting for 16.6% of the total. In 2009, China’s production was 313.98 mt., which
made it the largest gold producer in the world. While South Africa produced 204.92 mt., and Ghana was
still a major gold producer in Africa. With a production of 90.20 mt. in 2009, Ghana became the second
largest gold producer in Africa. Zimbabwe has historically been a prominent gold producer in Africa, and
Tanzania and Mali are rapidly becoming the newest African gold producers with several mines being
commissioned or in final feasibility stages.
Gold production in West Africa is set to rise by about 30 percent over the next 4 years, mainly driven by
the higher output from Randgold and Iamgold. Gold production in West Africa is expected to rise by
about 2 Moz a year or 57 tones by the end of 2013. The combined gold output from Ghana, Mali, Guinea,
Burkina Faso, Mauritania and Ivory Coast has risen by more than 65% over the last five years to about
190 tones per year. However, these West African countries were growing off a small base, and despite the
sharp increase, these countries still accounted for less than 8% of 2,500 tones of gold mined globally in
2009.
As a special goods characteristic of finance, gold is of great significance to the national economy and the
people’s livelihood. What should the government do to achieve effective regulation? With a further study
of the government regulation and policy changes on gold and gold market in the leading gold producer
and consumer countries in the world, it puts forward the proper strategies and methods that African
government should take to achieve effective regulation on gold market.
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