GOLD MINING PROBLEMS THREATEN CHINA COIN SALES

GOLD MINING PROBLEMS THREATEN CHINA COIN SALES

China's foreign exchange revenues from international sales of gold coins could be hurt by problems facing the country's gold mines, an industry spokesman said.

The gold mining industry, believed to be the largest in the Orient, is plagued by a shortage of ore, rampant smuggling, poor transportation and inadequate supplies of raw materials and fuel.Just under 60 percent of the output target for the first two months was met. This will possibly prevent us from achieving the whole year's quota, said a spokesman at China Gold Co.

One negative factor is the belief by some miners that the government will raise domestic gold purchasing prices.

As a result, many miners hold on to gold in the hope of selling it at a higher price, the spokesman said.

China relies on a good supply of gold for its gold coinage program. A commemorative coin series to celebrate the Year of the Dragon in the Oriental calendar promises to be the most important in terms of generating foreign exchange and promoting China since the nation began minting commemorative lunar year coins in 1980, Gong Qing Dong told The Journal of Commerce.

Mr. Gong is general manager of a company that works in conjunction with the central bank, which issues the legal tender coins.

Foreign exchange generated from selling the coins wholesale will be used to

purchase gold on the international market so as to keep China's reserves stable, Mr. Gong said.

The Dragon coins have become very popular in the international market. The minting isn't enough for demand, he said.

Nine types of coins in silver, gold and platinum were designed and minted in Shanghai and Shenyang in limited quantities. They bear designs of one, two or four dragons on the obverse and images of either the Temple of Heaven or Great Wall on the reverse.

This year is the first time China has offered a platinum coin. It is one ounce 99.95 percent pure made from metal imported from Canada via Hong Kong;

2,000 were minted.

Although he wouldn't reveal the asking price for coins, Mr. Gong notes that in February dealers were selling platinum coins for $897 each, a one-ounce gold coin at $833 and a one-ounce silver at $430.