National Geographic : 1974 Jan
From tons 4 of ope, abutton of bullion TREASURE-RICH REEFS of South Africa yield their hoard grudgingly. Some 21/2 tons of rock must be processed (below) to produce an ounce of gold and a sliver of silver. -- I. Like a mighty nutcracker, steel jaws shatter ore into softball-size fragments. Hand sorters discard pieces lacking gold. K) 3. Air jets and mechanical arms in agitator tanks mix cyanide into powdered ore and water, called slime. This releases gold from rock. 2. After further crushing, the ore mixes with water and enters a revolving cylinder, to be pulverized by tumbling steel balls or bars. 4. The gold-cyanide solution and slime funnel into vast tanks where the rock particles slowly sink. The clarified solu tion is fed into filtration units. 5. Gold-cyanide solution is 6. Zinc dust added to the filtered to strain out any solution separates the cyanide remaining rock particles, and from the gold, which emerges then is deaerated. as an impure powder. 7. The gold is melted with fluxes such as borax. As the metal cools in the bottom of a conical mold, the fluxes combine with impurities and float as slag. 8. Final product: a shining "button" 90 percent gold, the rest silver. Further processing at a central refinery yields the 99.6 percent-pure gold at right. from scores of its member countries, like this: Austria, 1 schilling = U. S. $0.0385; Italy, 1lira = U.S. $0.0016; Japan, 1 yen = U.S. $0.0028. And then: United States, 1 dollar = 1/35th of an ounce of gold. The world's exchange rates stuck close to these values. Any country's central bank could send any dollars it had acquired to the central bank of the United States, to the Federal Reserve, and have those dollars ex changed for gold. And so in foreign eyes the U. S. dollar was, literally, as good as gold. It was trusted. This display has been covered up. The U. S. Government no longer redeems dollars for gold. At IMF meetings I've heard finance ministers by the score discussing monetary reform. Mention gold and some of the minis ters light up, some wince. It's a hot potato. Shall gold remain at the base of the mone tary system? Afghanistan, France, the Philippines say yes. The Netherlands, Nigeria, New Zealand say no. So does the United States. It wants the role of gold to diminish. But what's to take its place? What will be trusted? Says the minis ter from Malaysia, "When all is-said and done, gold is still gold...." The ministers will continue to meet, but for the time being the world's currencies are "floating"-each is worth what traders will give for it, from day to day. The U. S. dollar has been floating downward. This weakness of the dollar, and a mount ing worldwide distrust of paper currency gen erally, has been at the bottom of the recent gold excitement. So I hear one mild English afternoon in St. Swithin's Lane, from the Chairman of the London Gold Fixing. He adds that whenever the price changes by three to five dollars in a single day, there's a lot of speculation going on. "But of course it isn't simply a question of speculation. Say you are treasurer of a cor poration that operates in several countries, and you have ten million dollars in cash. You're worried that the dollar may be de valued by 10 percent; you'd still have ten million dollars, but their purchasing power in the international currency market would be down accordingly. But say you took your ten million and bought gold at 70. Then the dollar is devalued, (Continued on page 24) Eloquent evidence of South Africa's bounty, 271/2-pound bars weighing some 348 metric tons crowd a bank vault in Pretoria. During four months of 1973 their free market value in dollars increased almost 100 percent-from 770 million to 1.4 billion.