If the press releases and reports crossing my desk lately are any indication, only gold and diamonds are worth pursuing these days. I know that isn’t truethere are many successful base metal, oil sands, uranium, coal and industrial minerals producers out there, but they are rather quiet these days. It appears that only the gold and diamond hunters are tooting their own horns.
Some very important news for the gold industry is the deregulation of the Chinese market. In October 2002 the Shanghai Gold Exchange opened for business, and in March 2003 the government eased the rules covering both domestic and international participation in the fabrication industry. Both are pivotal developments, according to the World Gold Council. Foreign companies are now welcome, provided that if the jewellery or metal is to be sold in China, they purchase the gold locally.
As China’s sleeping dragon opens an eye to peer at the 21st Century, the rest of the world is waking up to the fact that this most-populous country is an economic powerhouse. Chinese gross domestic product is the fastest-growing in the world, consistently above 7% annually. The World Bank ranks China’s economy the seventh largest in the world. China is the world’s largest consumer of steel and the second largest consumer of copper and aluminum. It was also the world’s third largest consumer of gold in 2002. That year physical demand for gold in China was about 215 tonnes (roughly 5.7 million oz) or 6% of the world’s demand. Per capital gold consumption was about 0.16 g, compared to the world average of 0.7 g.
Added to the strength of the Chinese economy is the penchant of its citizens to bank their savings. If three billion Chinese decide to add gold to their investments, the potential market is huge.
Perhaps the Canadian companies exploring for gold all over the world are simply ahead of their time.