A team from the United States Government Accounting Office are in Britain this week as part of a congressional initiative to examine the feasibility of imposing sanctions on South Africa's gold. The office, a non-partisan research department, has been asked to pro duce the report for Senator Edward Kennedy, co-sponsor of a new US anti-apartheid bill which, if passed, would have a serious impact on the South African economy. South African mining companies, through the gold promotion organisations that they discreetly dominate, have expressed alarm at the prospect of Pretoria's principal foreign exchange earner becoming a target for sanctions.
The Gold Institute in Washington, which represents bullion dealers and refiners, recently sent out a "member alert" notice, warning of the office's investigation and promising concerted lobbying on Capitol Hill. Kennedy's bill, presented to congress last week, is supported by three other Democratic senators, Alan Cranston, Albert Gore and Paul Simon. Its main provisions are a complete ban on exports and imports and, most significantly for the capital-intensive South African mining houses, a requirement on US citizens and corporations to divest the large volume of South African stocks held in the US, many of them in the gold mines.
In London, the team is expected to meet representatives of the five London firms which fix the daily gold price as well as executives from Consolidated Gold Fields -the mining house currently being stalked by Anglo American Corporation – and campaigners for gold sanctions. The team will also examine the single most important gold market – the Italian jewellery business which buys most of its gold from South Africa, half of it directly through licensed Italian banks and half through Swiss banks.
This trade as recently revealed some of the secrets of the South African gold business, leading to the resignation of Elisabeth Kopp, the Swiss Justice Minister, in December, after admitting that she had warned her businessman husband of an impending investigation of Lebanese drug money through Switzerland. Mr Kopp was on the board of Shakarchi Trading, a Zurich-based firm dealing in currency and precious metals and a big supplier of South Africa gold to the Italian jewellery industry.
The London-based anti-apartheid group, the World Gold Commission, has recently conducted its own investigation into the Italian jewellery business, it has also involved the main Italian trade unions in a campaign to switch to gold from other countries.
This article originally appeared in the Weekly Mail.