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produce 800 tonnes of gold. It is expected to be operating
by 1981.
    The gold world is surrounded by a cloak of
self-perpetuating secrecy, making accurate figures of supply and demand
difficult to come by. This difficulty is accentuated when it comes to
attempting to assess production and sales of the communist countries. The flow
of gold from Russia and other communist countries tends to follow economic
circles and sales coincide with needs for foreign currency for imported capital
equipment, or to buy grain to offset a bad harvest. In the opinion of experts
the Russians use the world gold market well and do not seek to depress the
market for political reasons.
    Russia last published information about the
Soviet Union’s output of gold in 1935. The figures then were production, 150
tons; reserves, 745 tons. Since then a total of just under 3,000 tons were sold
to the West over 13 years to 1965, when sales were made every year building up
from a modest 70 tons a year at the beginning of that period to 1,400 tons
annually in the three final years. Then followed an interval of six years in
which there was nothing beyond some token sales. From 1973 to 1975, Russian
sales averaged over 200 tons a year. Experts guess that Russian production is
about 400 tons a year, with present reserves of 2,700 tons. The three biggest
mining groups are Severovostokzoloto, Yakutzoloto and Zaibakalzoloto.
    In 1980, Consolidated Gold Fields estimated
Russian gold production to be in the range of 280 to 350 tonnes a year. By
contrast, South Africa, which mines about half the world’s gold, produced 706.4
tonnes in 1978.
    In 1976, 1977 and 1978, the Soviet Union
sold more than 400 tonnes to the West; in 1979 about 220 tonnes.
    In 1980, Russia’s gold production was
expected to rise. Two main mines had been identified, partly by satellites and
partly through intelligence from defectors such as Colonel Penkovsky. One of
these mines, Muruntau, in southwest Soviet Union, is thought to produce about
80 tonnes a year. This would make it the biggest gold mine in the world, the
next being Vaal Reefs, the Anglo-American mine at Klerksdorp in the western
Transvaal, which produced 67 tonnes in 1978. The other identified Russian gold
mine is at Zod, quite close to the Turkish border. This is much smaller. In
combination with other deposits in the vicinity it is estimated to produce 10
tonnes a year. Both Muruntau and Zod are mainly open-pit workings, though
underground reserves are also thought to be extensive. Muruntau, in particular,
may look forward to a long life. About 60 tonnes a year come from copper ore
mines and zinc mines. The balance of estimated production is provided by the
older mines in Siberia where the output is believed to be falling.
    Russian gold reserves are thought to be
enormous. In 1934, Russian officials put the figure at 3,500 tonnes. Geologic
reserves are also considerable.
    China produces perhaps 50 tonnes a year, the
third biggest gold producer in the world, on par with Canada.
    In 1976, it was estimated that perhaps 300
tonnes of gold were sold from communist countries, including 80 tonnes from
China.
    In 1980, it was reported that China intended
to develop three gold mines with estimated reserves of 200 tons of gold in east
China’s Shandong province. American and Canadian companies were to help.
    Although the
British economist J.M. Keynes called gold a ‘barbarous relic’,
ordinary people the world over (as well as many bankers), still see gold as a
sheet anchor against devaluations, insecure currencies and the hazards of war.
    It is estimated that throughout history,
between 80,000 to 90,000 tonnes of gold have been mined, slightly less than
half of which is held in official monetary stocks either by central banks, the
International Monetary Fund (IMF) or the Bank for International Settlement. The
USA is believed to have 8,500 tonnes, IMF 5,000 tonnes, West Germany 3,650
tonnes and France over 3,000 tonnes. The rest exists