Shanghai Pushing Gold to $1,600 Thwarts Fight to Shut Mines
Illegal mine owners are taking advantage of rising demand for gold, and surging prices, and exploiting the migrant workers who find work in the dangerous mines. From Bloomberg:
Trade volume on the Shanghai Gold Exchange, set up in 2002 to end the People’s Bank of China’s monopoly on gold trading, surged 43 percent in the year to Oct. 31 from the same period in 2009, Shen Xiangrong, chairman of the bourse, said Dec. 2. The country’s gold consumption may double in the next decade, the World Gold Council forecasts.
Higher gold prices put at risk China’s efforts to clean up an industry that relies on cheap labor working without adequate protection, according to Zhao Qingming, a Beijing-based senior analyst at China Construction Bank Corp. Migrant workers move from mine to mine without contracts, and are often unable to get insurance or even compensation, the miners say.
China cut the number of licensed gold mines from 1,200 in 2002 to fewer than 800 last year. Yet miners are still flocking to the mountain to feed Chinese gold demand that is growing faster than the mines can satisfy it.