Gold.. Africa's wasted wealth and fortress of great powers

The crisis that the global economy has suffered over the past three years, beginning with the outbreak of the Corona epidemic (Covid-19) and ending with the ongoing Russian-Ukrainian war, and the waves of recession without precedent she witnessed. Establishing the importance of gold as a safe haven for investments and as a viable means of escaping the cancerous inflation trap. This has gnawed at the bones of all international economies and plunged millions of people around the world into poverty and destitution.

And the yellow metal has evolved from a simple precious metal of great financial value to a haven for capital and a great investment exchange in light of the positive expectations of achieving more guaranteed gains, bypassing in many of its tracks the energy market, which even recently has been the safest arena, at a time when most other investment areas of tremors and volatility.

As the economic crisis is expected to continue and the waves of stagflation continue in the case of the political and security liquidity plaguing the world, gold will become the most targeted investment destination for global capital, and areas with large areas. The reserves of this mineral will become an arena of competition between governments and companies.

yellow metal

Gold has the symbol Au and the atomic number is 79. It is one of the elements of the eleventh group of the periodic table. It is a metal with a high atomic number. It is found in nature in metallic form of reddish yellow color, ductile and malleable and of high density. It is classified as a noble metal because it is unaffected by the most common acids, which are a mixture of nitric acid and hydrochloric acid.

Gold is present in the earth's crust in many forms, sometimes as lumps or granules inside pictures, and it can be present in silt at the bottom of rivers or as veins in the ground, and sometimes it is present as a solid solution with metallic silver in the electrum alloy, and it can fuse with other metals such as copper and mercury, making up the natural alloys.

Many theories have referred to the appearance of gold, some of which attribute it to the processes of nuclear synthesis in supernovae, even if it results from a collision between neutron stars, since it was present in the form of dust during of the formation of the solar system, which leads some researchers to believe that it could have been present in the Earth's core when the Earth melted during the formation of the solar system.

It is estimated that there are around 2,700 documented geographic locations of gold ores around the world, while the average percentage of yellow metal in the earth's crust is around 0.004 parts per million (ppm), or about 4 grams per thousand tons of rock.

Proponents of this view tend to believe that two billion years ago an asteroid collided with Earth and caused the Vredefort crater, responsible for fertilizing the Witwatersrand basin in South Africa. with gold deposits, and from there gold dust began to spread.

However, this view was met with some doubts, as another view saw that the rocks which contain gold in the South African Basin, which is the center of putting gold on Earth, existed in a period dating back to between 700 and 950 million years before the collision that favored the emergence of other theories, such as those that attribute the origin of the formation of gold in the layer of the Earth's mantle, which reached the crust as a result of geological changes, and proponents of this view have relied on findings that were found at Desiado Najd in the Patagonia region of Argentina.

It is estimated that there are around 2,700 documented geographic locations of gold ores around the world, while the average percentage of yellow metal in the earth's crust is around 0.004 parts per million (ppm), or about 4 grams per thousand tons of rock. ores. But this value is not fixed because it changes from place to place depending on the region.

The oldest mineral discoveries

Opinions differ on the date of the discovery of gold, but the most correct indicated that the oldest written reference referring to the deposits of this metal was recorded in 1900 BC, at the time of the twelfth dynasty of Egypt in ancient Egypt, while the oldest known reference is gold. The map of gold mines dates back to the 19th dynasty of Egypt (period 1320-1200 BC).

In the 15th and 16th centuries AD, the Aztec people (an ancient civilization in the Americas now called Mexico) viewed gold as a divine source, and they literally called it "the offspring of the gods" in their language (Nahuatl ), and the spread of this metal in this region, and talking about the existence of cities full of gold, two main reasons push Europeans to discover the New World.

Gold in Ancient Egypt

production card

World gold production is approximately 3,417 metric tons, led by China with 4,500 metric tons, followed by Australia with 270 tons, then Russia with 250 tons, while the United States United ranks fourth with 209 tonnes, Canada fifth with 170 tonnes. tonnes, followed by Peru 150 tonnes, South Africa 140 tonnes, while Indonesia and Uzbekistan ranked eighth and ninth with production of 100 metric tonnes each.

As for the world's gold reserves, there are about 20 reserves of this precious metal in the world, according to the World Gold Council, led by the United States with 8133.5 tons, followed by Germany with 3355.1 tons, then Italy with 2451.8 tons, then France with 2436.6 tons, then Russia with 2298.5 tons. Then China 1948.3 tons, followed by Switzerland 1040.0 tons, then Japan 846.0 tons, India 768.8 tons, Netherlands 612.5 tons, Turkey 457.7 tons , from Taiwan 423.6 tons and from Kazakhstan 3839 tons. Portugal 382.6 tons, Uzbekistan 363.9 tons, Saudi Arabia 323.1 tons, United Kingdom 310.3 tons, Lebanon 286.8 tons, Spain 281.6 tons, Austria 280.0 tons.

90% of the world's gold consumption is in the manufacture of jewelry and used gold objects, while the remaining ten are in other areas, including the electronics and medical industries.

The International Monetary Fund also has a reserve volume of 2,814.0 metric tons of gold, which means it can be considered the third largest since it is considered a country, while the European Central Bank has 504.8 tons and ranks 12th among countries, while many countries, other mines are also prevalent. About finds that have not yet been recorded and about which there is a lot of controversy.

90% of gold consumption in the world is used in the manufacture of jewelry and used gold objects, while the other ten are used in other areas, including electronics industries, because gold is characterized by its ability to conduct well and its resistance to oxidation and corrosion, which has made it an essential element in the realization of non-corrosive electrical connections in computers and electronic devices. last.

Japanese electronic technologies contain about 16% gold and 22% silver compared to the world's amount in electronic industries. It has been used in dentistry and other fields.

Safe haven for capital

Gold has entered the currency exchange since ancient times, as the first known gold coin in history was minted in the year 550 BC when King Crusias, King of Lydia (a region located in present-day Turkey), ordered the manufacture of gold coins, to keep the finished gold coins. The time, along with other fiat currencies, until the establishment of what is called the "gold standard".

The gold standard is a monetary system that relies primarily on using the metal as a standard to determine the value of a country's paper currency, tying the process to a fixed amount of gold, and therefore easy conversion is made of paper currencies in quantities. Gold, and according to this rule, anyone can present paper currencies to the State and obtain in exchange the equivalent of gold, and Great Britain was the first to invent this rule in 1821.

Prior to this date, silver was the base metal people relied on to buy and sell, but the spread of large amounts of gold to North America in the 1870s prompted many countries to change the exchange of metals from silver to gold, and among those countries that changed their regime at a time when Germany and France were side by side with America, right up to World War I in 1914.

During the war, the majority of countries imposed strict restrictions on gold exports, and paper currencies became the basis and could not be converted into metal, but the recession that threatened the world in the aftermath of this war forced everyone back to gold. . Standard again.

In times of wars and conflicts, gold is of great importance for countries, and the British newspaper "The Telegraph" published that Russia has stockpiled large amounts of gold in recent years, for l help limit the potential effects of economic sanctions imposed on it. From the West because of its military movements on its borders with neighboring countries, pointing out that Moscow "has gold today whose value exceeds the value of its reserves in US dollars in June 2020, the bullion of gold constituting 23% of total Russian reserves". ”

The famous American billionaire, Warren Buffett, had a famous saying that reflects his hatred of gold in general, when he said: "Gold is mined from the earth, then you melt it down, and you dig a new place in the ground to put it and we pay people money to keep it because there is no benefit to it.

However, after years of that belief, he turned to exploration investing, with his company Berkshire Hathaway investing nearly $565 million in the world's second-largest gold mining company, the Canadian company Barrick Gold, in appreciation of the value of yellow. The metal as one of the safe havens for investments and capital. Funds in the face of global economic crises.

Factors strengthening the position of gold in the world

The World Gold Council (WGC) has examined in a study conducted by the most important characteristics that enhance the economic importance of the yellow metal, which places it on the list of strategic minerals in the world. % since the abolition of the gold standard in 1971, and a compound annual return of 7.6%, which has brought its investment performance in line with the "Standard & Poor's 500" index on the long term.

It also exhibits significant diversification characteristics in times of risk, making it the most effective diversified investment relative to other commodities, as it responds to investors' desire to seek high-quality liquid assets that preserve capital. and reduce losses. For example, gold rose 8% as it fell. Other commodities rose 9% on the global equity selloff in the fourth quarter of 2018.

Gold is a very liquid investment, second only to oil, with an average daily trading volume of $51 billion in the futures market, followed by natural gas and fuel oil. In general, the average daily turnover in the global gold market is between 100 and 200 billion dollars.

Gold is a hedge against inflation risk. At a time when other commodities have fallen victim to waves of stagnant inflation over the past few years, gold had a different view, as it recorded positive returns, which was, of course, reflected in rates. increase in demand, and depending on economic conditions. estimates. Inflation rates will increase in the coming period, indicating an increase in demand for the yellow metal.

Gold is the most stable and least volatile commodity, compared to other commodity, individual and stock indices. It also improves portfolio stability and improves risk-adjusted returns. This in addition to being a safe store of value, due to its long and influential role as a monetary asset, and because it is a rare and valuable asset in the market. For centuries, gold has been a logical choice as an anchor for currencies, and given this value and status, the yellow metal has made a significant contribution to global economic engineering, and even today Today, it is considered a valuable international asset that protects against currency depreciation. .

Finally, gold is a very liquid investment, second only to oil, with an average daily trading volume of $51 billion in the futures market, followed by natural gas and fuel oil. In general, the average daily turnover in the global gold market is between 100 and 200 billion dollars.

gold mining contest

The growing importance of gold in recent decades has turned mineral mines into arenas of competition and conflict and, in many cases, has been the cause of civil and tribal wars. These countries, and the low standard of living they suffer from, cause them to give up their wealth for a small amount of money, as they lack the capabilities to purify and extract the metal and then sell it immediately. Fair official price.

Ghana tops the list of African countries producing the most gold in 2018, with an average of 158 tons, followed by Sudan with 127 tons, while South Africa comes in third place with a total production of 119 tonnes, while Mali ranks fourth with 49 tonnes. tons. tons, followed by Burkina Faso with 44 tons. tons.

Mali is a stark example of the gold that sparked the conflict. The external interference from which it suffers, reinforced by the French presence especially since 2013 in particular, observers attribute it to the desire to control the country's natural resources, especially after the recent colossal discoveries of oil, copper and gold.

Since 2018, France has started to significantly strengthen its intervention in Mali, especially after it ranked fourth in Africa for gold production, while the country's exports of the yellow metal increased by 15.4% for reach 2.4 billion dollars, which constitutes 7% of the GDP. . Nearly 70% of the country's exports. total volume of exports.

It is expected that in the coming period, during which the stagnant waves of inflation are likely to continue, competition will intensify between big business and large economic entities, especially states. United States, China and Russia, as well as Canada and France, in order to obtain subsidies. and prospecting contracts for the yellow metal.

And from Mali to Chad, the areas of the southern border strip of Libya and the link between Chad, Niger, Sudan and Algeria are among the richest gold areas in Africa, and are therefore transformed into hotbeds of conflict and permanent security tensions. . Due to the controversy over the illegal exploitation of minerals.

This bar has turned into a big arena for tribal rivalry. In the southwest, the Tabu, Al-Hasawneh and Mahamid tribes dominate, and in the strip near the border with Algeria, the Tabu and Tuareg tribes dominate. Gold prospecting process.

Major countries, through their companies, were also keen to compete for the African gold cake, with the Chinese company “Wanbo” having managed to secure more than one concession contract for gold exploration in Sudan in October 2020, alongside 6 other local businesses. .

And from Sudan to Egypt, where several foreign companies have won gold exploration contracts in the Egyptian desert, and among the most important companies that have won these grants are the Australian Centamin Company and the Canadian companies Barrick Gold and B2 Gold. . (B2Gold), Lotus Gold, Red Sea Resources, Egyptian Medaf, Abadi Mining, North African Mining, Nuba Mines and Ibdaa for Gold”.

Some countries have paid attention to African gold, in order to obtain it by various means, legal or illegal, in order to revive their coffers of this metal, the value of which is increasing day by day, and which has become the most steady. Faced with any price fluctuation in the global commodity market. The Emirates on Sudanese gold is a crude example of this new international policy.

It is expected that in the coming period, during which the waves of stagflation are likely to continue, competition will intensify between large companies and large economic entities, especially the United States, China and Russia, as well as Canada and France, in order to obtain subsidies and exploration contracts for the yellow metal, which has become a commodity, a strategy capable of dominating economies over others in the current arena fierce global competition.