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Harmony Could Make World Gold Council Starve

SA gold producer Harmony Gold may affect future promotion efforts by the World Gold Council

SA gold producer Harmony Gold may affect future promotion efforts by the World Gold Council in case of successful hostile takeover bid for its rival Gold Fields.

Bernard Swanepoel, Harmony CEO, said he would end Gold Fields' membership of the Council, saving about $7 million a year or about 11 per cent of the council's annual budget, which is mainly spent on the promotion of gold.

The threat to the council's budget comes early this year when the council cut staff numbers at its international offices, and moved its London headquarters to a cheaper office in the City of London. A significant share of the council's budget has funded the launch of gold investment products around the world.

Harmony is not a member of the council, nor are the bulk of gold miners. The miners that contribute account for only 30 per cent of global production. They pay $1.75 on each ounce of gold they produce to the council, giving it an annual income of $60 million.