The price of gold (green) against copper (red) over the last two years from Infomine.com.

I’ve always been intrigued by gold as metal. It’s not much use for industry except that due to it not tarnishing or corroding it is used in electrical contacts. Apart from that, a minor use as a lubricant on space missions and gold fillings, that’s about it. Unlike a genuinely useful metal like copper, its main ‘uses’ are bullion and shiny things. So as the world goes into recession and demand for useful metals plummets so does their price. Unlike gold. Gold price is currently governed by the weakness of the dollar due to quantitative easing (printing money to the likes of you and me). Although, whisper it quietly, we might be seeing the first green shoots of recovery in the price of copper, gold is now touching $1000/oz and some analysis think that it could rise to $1400 once the psychological barrier is breached.
But this rise in the price of gold has lead to some tragic consequences in South Africa because the returns have made illegal gold mining much more lucrative. 76 illegal miners were killed this week in the Eland Shaft in South Africa’s Free State. The owners, Harmony Gold, have brought 294 illegal miners to the surface. The fatalities are believed to have been caused by poisonous fumes from an underground fire they are believed to have started themselves which blazed for days.
Harmony states that it has suspended 77 employees and 45 contractors since January for assisting illegal miners, most either for allowing them access to the mines or buy providing supplies. Some of the illegal miners are believed to spend many months underground at a time.
So the next time you want to buy something shiny you might want to consider the real price of gold.
Full coverage from Mineweb.com here, here, here and here
P.S. does anyone else find Mineweb’s strapline oxymoronic – “Uncompromising Independence … in association with InfoMine”.
P.P.S. Looks like it is a bad week for miners – Dave Petley is reporting on his Landslide Blog that 27 iron ore miners are trapped underground in China with a massive rockfall covering the two mine entrances. Getting them out doesn’t look like it is going to be easy.