The words ‘mining’ and ‘marketing’ were
hardly ever mentioned in the same sentence in the olden and golden
days, but marketing has probably become the single most important
factor in the long-term survival of the teetering gold-mining
industry.
Gold is losing its unique historic hedge as a store of value,
evident from the dishoarding by bullion banks, and the metal would
have to be taken into a new consumer era.
Despite the perceived ‘magical’ qualities of gold that
have saved mining companies from getting involved in the
‘niggling’ marketing and downstream issues in the past,
the precious metal will not be able small scale gold mining in sierra leoneto change its bulk support base
from the traditional gold-hoarding bullion banks, to individual
consumers all by itself.
Some producers have started recognising the importance of marketing
in recent years, the leader among which is the world’s
biggest gold producer, Anglogold. To other producers worldwide, the
current gold crisis might just serve as a installation erection contractor of a stone crusherwake-up call that gold
producers will have to start marketing their product.
Ironically, most gold producers have been doing quite the opposite,
a fact illustrated by the waning support for the World Gold Council
(WGC), which is potentially the best platform to restore gold to
its former glory.
Support for the organisation as a permodern stone crushing plantcentage of world gold
production is at around 30%.
The WGC boasts no small achievements, including lobbying activities
which have resulted in the freeing up of gold imports into
India.
It has worked on jewellery design trends in five cultural blocks
from east to west and each year a billion items of gold jewellery
are sold.
“The majority of gold producers today are not members of the
WGC, nor do they spend a single cent or a minute on an activity in
the market that would benefit their product,” comments
Anglogold executive director marketing Kelvin Williams.
Williams also uses the current crisis to emphasise the importance
of marketing, suggesting that gold producers contribute a
percentage of turnover to a central pool for marketing. The
jewellery sector seems the natural choice for gold producers to
invest their efforts – this sector represented 78% of gold
offtake in 1997.
Although this sector has significant potential to grow, there are
several other opportunities to be explored to expand the gold
consumer market.
Anglogold plans to do major market development over the next few
years.
The idea is to expand physical demand by persuading consumers that
gold is a good investment – be it in the form of gold
equities, or physical gold jewellery, ten-tola bars or coins. It is
particularly the local jewellery industry which represents a
gold-mine of opportunities waiting to be explored.
“We have suggested the establishment of a marketing and
finance vehicle for jewellery in which producers, unions, the
public and other parties could obtain shares,” jewellery
cluster chairperson Geoph Foden tells Mining Weekly.
However, he says that there has been talk, but no action in this
regard.
Only about US$2-million is required to set up these vehicles.
Consolidated African Mines also has a successful marketing campaign
under way in the form of Consolidated Bullion, which markets
branded gold.
The company has come forward with innovative ideas to grow the gold
consumer market, such as using the Internet to circulate gold as
currency.