Mountain of gold discovered in Africa, mining banned while authorities figure what to do

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Luhihi Mountain in Congo’s South Kivo province is currently the scene of a gold rush, with some reports stating that the mountain is 60-90% gold. News of the mountain of gold caused hundreds of people to flock to the area with picks and shovels and a lot of ambition.

Melees erupted as masses of people worked up a frenzy to strike it rich with a handful of the precious metal. In turn, their actions caused the government to issue a decree banning mining on the mountain until new rules could be established, “Not only to protect lives but also to guarantee the traceability of the gold produced in accordance with Congolese law.”

The minister assured citizens that the suspension was made in order to identify the miners and ensure that they are registered with the regulators. “Traders, miners, and the Congolese Armed Forces (FARDC) must abandon the Luhihi mines and are prohibited from mining until further notice,” said the decree.

The discovery of the mound of gold ore is perhaps as significant for Congo as was the discovery of the Silver ore in Potosi, current-day Bolivia, in the 1500s, say mining analysts. The silver mountain made the former Inca hamlet the economic center of the world and transformed it into the wealthiest and most powerful city in the world at the time.

By Milan Sime Martinic

Commodity demand growth will go up, due to low-income households and green energy – Goldman Sachs

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Global head of commodities research at Goldman, Jeff Currie, stated his position on the future of the sector this week, citing two big factors why commodities would continue to go up.

One was that while historically stimulus benefited high-income households, current stimulus benefits low-income, who spend a lot more on commodities.

The second factor was the future prospects of oil. Because oil will be less in demand in the future, companies won’t be investing in bringing more oil to the market, even if oil prices rise.

Demand growth for oil, Currie said, would start to slow in 2024-2025 and after 2030 would decline. “What that means, the stimulus effect of all this green spending actually amplifies oil demand,” Curry posited, but, “If we know we have a blueprint for energy transition in the U.S., Europe and China, and the clock is ticking on oil, are you going to invest in long-lived oil production? The answer is ‘no.’ So the only thing you’re going to invest in is short cycle production in the U.S., Middle East and Russia. Everything else is too risky to make investments. The hurdle rate to get investment in this sector is substantially higher than what it was historically.”

Currie saw some potential inflation risk accompanying the demand-pull factors that are driving commodity prices. Commodities prices increases, he said, are in part due to the hedging of bond-holding portfolio managers dealing with inflation possibly creeping up into the 2% range.

By Sid Douglas