Algeria’s gold reserves virtually unchanged since 2008, according to the World Gold Council report 2017 where it is shown that the gold reserves held by Algeria are 174 tonnes the World Gold Council, a very slight increase compared to the period 2008/2017.
In several contributions on this subject between 2009 and 2017, I had estimated it to be $9 billion in late 2008 and between six and seven billion Dollars between 2015 and 2017.
According to the report of the World Gold Council (WGC) in 2016, the total reserves of the top 100 countries were estimated to 32,813 tons, almost equivalent data (32,702 tonnes) by the WGC in its report of 2017 which lists the gold reserves held by central banks.
According to a study (2017) by Geological Survey, there would still be about 50,000 tons left to extract. For 2017, according to the WGC, world demand for gold declined by 7% to reach 4,071.7 tons. The annual influx of gold-backed stock exchange funds added 202.8 tonnes to world demand in 2017, but this accounted for only about one third of the influx of 2016. The global demand for ingots and gold coins has also fallen from 2% to 1,029 tonnes while U.S. retail investment has reached their lowest level in the last ten years, according to the report. On the other hand, the year 2017 has experienced the first annual growth in the demand for jewellery since 2013 thanks to the stable prices of gold and the improvement of economic conditions. The demand for gold in the technology sector increased by 3% to reach 333 tonnes, ending a decline for six consecutive years.
According to the WGC report for 2017, the first 10 (ten) countries are as per the chart below:
However, in several contributions back in 2009 and 2017 following the various reports of the WGC, I noted that Algeria in 2009, was ranked between 25th and 22th, with 173.6 tons of gold.
Within the Arab world, in 2017, it was second in gold reserves, see the chart below.
Per the 2016 report, referring to the African area, Algeria being 25th at world level is top, first rank on the African continent, as shown below.
To determine the intrinsic value of the 1 gold ingot kilogram, multiply the price of the gold ounce by 32.15, then apply the Euro/Dollar exchange rate. Depreciation of the monetary value converted into gold Dollars between 2009/2017 contributed to a loss of more than $2.5 billion to its monetary value of the Algerian gold stock, which I had estimated, in 2009, at $9.75 billion. On May 28th, 2018, an ounce of gold is $1304.84. This gives an average for the gold stock of Algeria, not including in the foreign reserves, about $7 billion representing 7.21% of foreign exchange reserves that were closed at $97 billion as at end of 2017.
Where is the additional production of gold mined at Amesmessa in the province of Tamanrasset, this having been active for years with significant investments?
The gold-producing company is a company that can either sell to the Bank of Algeria to increase its stock of gold or export it or sell it directly to jewellers.
The first option seems to have been discarded since the gold stock has virtually remained unchanged since 2009. Recall that on January 30, 2010 in a statement to the Algerian Press Service the Director general of ENOR, the gold mining company had officially declared: “The deposit of Amesmessa, located 460 km west of Tamanrasset, will benefit from a development plan with the objective of gradually increasing its gold production to three tons of gold annually.”
And for this period, as regards the company’s exports between 2009/2010, they were in the order of 848.49 kg of gold, while the local market consumed only 208.78 kg of gold. In February 2018 according to the Minister of Industry and Mines, the mining company, that is a subsidiary of SONATRACH Group should have in 2018, a gold production that should reach 286 kg, against 286 kg in 2016, or a significant regression of more than 560 kg compared to 2009/2010, which explains the structural deficit of this company which according to the Minister of Industry would have been 1.4 billion of Dinars (DZD) in 2016, DZD600 million in 2017 with a forecast of DZD400 million by end of 2018.
However, avoiding misinterpretation and to specify that the stock of gold or currencies in general do not create wealth, these are merely a means of exchange. In the past, tribes of Australia used salt bars because of their scarcity as a means of exchange. On the contrary, hoarding and speculation in refuge values such as gold, certain currencies or raw materials is harmful to any economy. Having foreign exchange reserves or gold is not necessarily the wealth of a Nation. There are countries with little or no foreign exchange reserves held by central banks but with significant development, with capital being transformed into productive capital. This is a necessary condition but not sufficient to secure the investment and especially for the rentier economies countries to avoid a greater slippage of the value of the Dinar compared to the currencies where there is a correlation of approximately 70% between the present value of the Dinar, and this stock of currencies via the oil revenues annuity. With exchange reserves of $20 billion, the official Algerian Dinar would float to more than 200 Dinars a Euro and 250/300 Dinars a Euro in the informal market. It is thus far from being a sufficient condition for sustainable development and above all from an ephemeral annuity based on hydrocarbons. The central problem for Algeria is to transform this virtual wealth into real wealth through a non-hydrocarbon development based on enterprise and knowledge, all conditioned by a new governance both central and local that adapts to the new global geo-strategic mutations.