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Epoch Times
28-04-2025
- Business
- Epoch Times
Africa's Gold Producers Scramble to Capitalize on Soaring Prices
JOHANNESBURG—In April 2022, gold cost almost $1,950 per ounce. That price is now just short of $3,425 and Africa's producers are scrambling to take advantage of a windfall propelled by market uncertainty, said minerals and markets analysts. And the big producers, such as Ghana and South Africa, are selling the precious metal mostly to traders and investors in the United States who are putting their money into gold—a commodity that thrives during times of instability, said economists who warn that the U.S. rush on gold is alienating other countries that are usually big investors in the metal. Gold's astronomical rise is also attracting organized crime groups, with more delving into the illicit trade than ever before, said law enforcement officials. Gold's record run began shortly after Russia invaded Ukraine in February 2022, traders explained. U.S. tariffs, particularly the 145 percent on imports from China and President Donald Trump's announcement of reciprocal tariffs on other countries, followed by a 90-day suspension, fanned the flames of uncertainty, with the price of gold rising by the day. The Trump administration has said the import duties, including a blanket 10 percent on goods and products coming into the United States, will reignite domestic manufacturing, create jobs for Americans, and generate billions of dollars in tax revenue. Africans and their governments were disappointed and angered when Trump imposed upon them tariffs between 30 to 50 percent. Related Stories 4/23/2025 4/21/2025 The economic policies, though, are proving to be a boon to Africa's gold producers, putting billions of extra dollars into their coffers, said trade analysts. Africa produces more than a quarter of the world's gold, which in 2024, was an output of more than 680 metric tons. The continent is the biggest regional producer of the precious metal, South African minerals expert Peter Majors told The Epoch Times, 'In times of market chaos and global uncertainty, investors run to a commodity that's always a safe bet, and that's gold.' Kanayo Awani, head of trade finance at the Africa Export-Import Bank, said gold is an asset that's frequently used to store wealth. A technician cleans impurities from melted gold bars at Primera Gold's laboratory in Bukavu, Democratic Republic of Congo, on May 12, 2023. Alexis Huguet/AFP via Getty Images 'Inflation across the world is eroding the real value of wealth. On the contrary, gold usually maintains and even increases in value over time. Gold has proven to be a stable and even an appreciating asset during high inflation,' she told The Epoch Times. Sam Ankrah, a Ghanaian economist and investment strategist who's the CEO of the Africa Investment Group, told The Epoch Times that a global trade war means central banks around the world are investing in gold, trying to diversify their asset bases and to reduce dependence on the U.S. dollar. The main buyer of gold currently is the United States, with the world's largest economy's 'greed for gold' disrupting global supply chains and freezing out other traditionally big buyers, mostly in Europe, said Majors. The United States has exempted minerals, including gold, from tariffs on the basis that they're essential to America's national security and economic development. In January alone, the United States imported $344 million worth of gold from Africa's second-largest producer, South Africa, Majors said the United States is set to import record amounts of gold from South Africa in 2025. 'South Africa's gold exports to America for the whole of 2024 were worth less than $700 million, so we're on track towards unprecedented exports,' he said. Trump has targeted South Africa in several executive orders since he re-entered the White House on Jan. 20, accusing Pretoria of policies that discriminate against white citizens and of siding with America's enemies. He stopped annual financial aid of $440 million to the continent's largest economy. In 2024, South Africa's exports to the United States, mainly gold and other minerals, were valued at $8.21 billion, Gold In January, the United States also imported gold from Canada ($1.1 billion), Switzerland ($575 million), Mexico ($414 million), and Australia ($404 million), the Bureau of Economic Analysis said. Data provided by the WGC in late February indicated that more than 600 metric tons, or almost 20 million ounces of gold, has been transported into vaults at the Commodities Exchange Center (COMEX) in New York since December 2024, with the main buyers being U.S. banks, investors, and traders. 'Supply chains have been disrupted because of this huge sucking sound, which has been the United States importing gold ahead of potential tariffs,' the WGC's John Reade The Council said the United States has the largest national reserve of gold in the world by far, with 8,133.46 metric tons, followed by Germany (3,352), Italy (2,452), France (2,437), and China (3,000). Richard Mubilu, mineral consultant and trade analyst at Pearl Precious Metals in Uganda, said that American demand for gold means other countries that usually hold vast reserves of the precious metal, like the United Kingdom and Switzerland, have seen their stocks dwindling. Some in Europe have accused the United States of 'draining' their gold reserves, and have suggested that the 'hoarding' of the precious metal in New York will cause a global shortage. Nikos Kavalis, managing director of European minerals consultancy Metals Focus, 'As the market has been shifting inventories of gold from private London vaults to COMEX vaults, the availability of metal in private vaults in London has been declining,' he said. Mubilu said other big buyers of African gold in 2024 were Poland, Turkey, India, and China. According to the World Gold Council, the major buyers so far in 2025, along with the United States, have been Uzbekistan, China, Kazakhstan, Poland, India, the Czech Republic, and Qatar. Gold's popularity means production in Africa is booming, but some regions have moved faster than others to cash in, Majors said. In West Africa, some of the world's biggest mining companies are pouring Professor Gilbert Khadiagala, a political scientist at Wits University in Johannesburg, told The Epoch Times: 'As things stand, some African gold producers are going to be hit with high tariffs by the Trump administration, like the 31 percent on South Africa. This has got them thinking: 'How about we offer Trump some kind of better route to our gold as a bargaining chip to reduce the tariffs, like giving the Americans mining rights?'' Gold's high price is also opening other, darker, doors. 'A lot of the gold entering the United States and other markets has been mined illegally,' Majors said. 'The UAE (United Arab Emirates) imports the most African gold, legal and illegal, and it's in the UAE that the gold is laundered and then exported around the world.' Jalel Chelba, head of the African Union Mechanism for Police Cooperation, said there's been 'a significant jump' in the numbers of international and African organized crime groups becoming involved in the illicit gold trade and gold trafficking. 'Criminals are exploiting the high price; they go where the money is,' he told The Epoch Times. 'Groups are concentrating less on crimes like human trafficking and drug smuggling and moving resources towards illegally mined gold from countries like DRC (Democratic Republic of Congo), CAR (Central African Republic), and Sudan, where there's conflict and lawlessness.' William Sommers, a broker who specializes in precious metals at the Johannesburg Stock Exchange, told The Epoch Times that buyers 'don't really care' where the gold comes from. 'It's a frenzy—just silly,' he said. 'If this carries on for the next few years, I don't know where it's going to end. I mean, there's not enough gold left in the ground to sustain this.'
Zawya
09-04-2025
- Business
- Zawya
Afreximbank raises $300mln via its first Chinese panda bond
NAIROBI: The Africa Export-Import Bank (Afreximbank) has raised 2.2 billion renminbi ($299.9 million) through its first issuance of a Chinese panda bond, it said on Tuesday, charting a path for other African entities seeking new fundraising avenues. China has pledged to open up its domestic markets for African issuers to borrow money through the so-called panda bonds - debt issued on its domestic bond market, denominated in yuan. However, those looking to do so face several hurdles, including issuing in a currency that is not globally freely traded. Afreximbank, which is the main trade financier for the continent with assets of $40 billion, said it will press ahead with a secondary listing of depositary shares, which are currently listed on the Stock Exchange of Mauritius. "The market has not been very good for us to make the foray. But I can assure you that it is still on our radar," Benedict Oramah, the lender's president and chairman, told an investor briefing. The board of the Cairo-based bank, which is mainly owned by African states, is working to identify a replacement for his job as president, he said, to be unveiled to shareholders in June. Asked about the impact of turmoil sparked by sweeping trade tariffs by U.S. President Donald Trump last week, Oramah said it is an opportunity to boost intra-Africa trade. "It will open the opportunity we all want for us to trade more amongst ourselves, trade more in value-added products," he said, adding it would encourage the bank to lend more to develop industrial power, including through economic zones. "We do not want commodities to be the driver of our business." Afreximbank's new panda bond has a 2.99% interest rate, it said. Bank of China Limited was the lead underwriter and bookrunner, and Exim Bank of China and ICBC the joint lead underwriters. The panda issue is the first by an African financial institution, but the second by any African entity, after Egypt issued a panda bond in 2022. Panda bonds were first launched in 2005, pioneered by the Asian Development Bank and the International Finance Corporation, the World Bank's private investment arm. Issuance hit a record 195 billion yuan in 2024, according to Deutsche Bank calculations.
Reuters
08-04-2025
- Business
- Reuters
Afreximbank raises $300 mln via its first Chinese panda bond
NAIROBI, April 8 (Reuters) - The Africa Export-Import Bank (Afreximbank) has raised 2.2 billion renminbi ($299.90 million) through its first issuance of a Chinese panda bond, it said on Tuesday, charting a path for other African entities seeking new avenues of fundraising. China has pledged to open up its domestic markets for African issuers to borrow money through the so-called panda bonds - debt issued on its domestic bond market and denominated in yuan. However, those looking to use the opportunity face several hurdles, including issuing in a currency that is not globally freely traded. "The issuance ... followed Afreximbank's successful navigation of the rigorous regulatory and approval processes for Panda bond issuance," the lender said in a statement. Afreximbank's new panda bond has a 2.99% interest rate, it said. Bank of China Limited served as the lead underwriter and bookrunner, while Exim Bank of China and ICBC were the joint lead underwriters. The panda issue is the first by an African multilateral financial institution, but the second by any African entity, after Egypt, which issued a panda bond in 2022. "This issuance highlights Afreximbank's commitment to diversifying its funding sources and to tapping into new pools of capital," said Chandi Mwenebungu, the head of treasury and markets division at the Cairo-based lender. Panda bonds were first launched in 2005, when the Asian Development Bank and the International Finance Corporation, the World Bank's private investment arm, pioneered them. Issuance hit a record high of 195 billion yuan in 2024, according to Deutsche Bank calculations. ($1 = 7.3358 Chinese yuan renminbi)
