Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Mines firms to launch coins to lift gold price

SOME of the world's largest gold mining firms are in talks to launch commemorative gold millennium coins, which could consume over 1,000 tonnes of the precious metal.

SBC yesterday said the project, which is the Swiss bank's brain child, could help prop up gold prices, which have been wallowing near 18-year lows since the start of the year, in the run-up to the celebrations at the turn of the century.

But bullion market sources were sceptical that 1,000 tonnes of gold worth around $10bn (pounds 6.1bn) and equivalent to nearly a third of total world demand in a year, could be consumed in the minting of the millennium coins.

"Just because you are coming out with a project does not mean you will have any takers for it. It won't take metal out of the market unless people buy it," one senior London gold dealer commented.

Gold was fixed at $292.80 an ounce in London yesterday morning, up $1.20 on its previous close in the New York market.

The millennium coins project would be led by Canada's Barrick Gold in co-operation with fellow Canadian miner Placer Dome, South Africa's Anglo American Corp and Newmont of the US, an SBC spokeswoman confirmed.

Anglo American, the world's largest gold producer, confirmed it was considering issue a gold coin to mark the millennium in partnership with other large producers of the precious metal.

"We have had some preliminary discussions with various other parties and we certainly think it is a very good idea," said James Duncan, spokesman for Anglogold, which is Anglo American's gold division.

"People have been issuing such coins down through time and celebrating the birth of a new century seems like an opportune time to do it again. Anything that promotes the use of gold needs to be looked at very seriously. It seems like a jolly good thing to do. What nicer way to signify to your heirs that you were around at the turn of the century. I will buy one for my grandchildren."

Mr Duncan said discussions between the mining houses were at a very preliminary phase and the mechanics of the millennium coins project had yet to be discussed.

The World Gold Council, a promotional and research group for the international gold mining industry, estimated total demand for gold at about 3,500 tonnes last year. Jewellery was the largest consuming sector at 2,000 tonnes.

A spokesman for the World Gold Council said: "Realistically it [the 1,000 tonnes for the coins] looks like an absurdly high figure, but we would be delighted if it were true.... It would have a very positive effect on the price."

The size of the coins will be determined by the gold price. The most popular is expected to be the 1 ounce coin, which would probably cost pounds 200 at today's prices, the SBC spokeswoman confirmed.