Iraq Aims To Increase Gold Production

According to Iraq's own data, aside from possessing the world's second largest crude oil reserves, the country also possesses important gold and diamond reserves. The Iraqi government is thus hopeful that gold mining can be an increasingly profitable venture for the country.

According to officials in Baghdad, Iraq has huge gold producing potential. Nevertheless, senior government members have stated that the country does not have the necessary know-how in terms if mining capabilities. The government could increase gold production in Iraq by granting production licenses to foreign mining companies, but employees of the national banking system do not possess the necessary knowledge about gold trading either. Now the Banks Association of Turkey has offered to train Iraqi bank employees in order to increase the latter’s knowledge of the gold market. In recent weeks representatives of Turkish private banks have visited Iraq with this venture in mind.

Turkey is one of the region’s largest gold producers. According to experts, Turkey possesses some of the world's largest gold reserves – up to 23 million troy ounces. While in 2010 only four gold mines were operating in the country, more mines will start operating in the next decade. Not only does Turkey produce gold – approximately 650,000 troy ounces in 2010 – but there is also a thriving gold market in the country. Now Turkish bankers will share their knowledge with their Iraqi colleagues. According to the Banks Association of Turkey, many Iraqi banks have expressed an interest in learning from the Turks. Thus, Turkey is hoping that many production licenses to mine in Iraq will be granted to Turkish mining companies.

Qusay Gomaa, a member of Iraq's coalition government and member of the government’s economic committee, has been one of those politicians arguing that Iraq needs to take advantage of its huge gold producing and trading potential. The strong rally in global gold prices has mainly been triggered by the economic problems of the industrialised nations in the West. The central banks seem to have no other choice other than to keep pumping money into the financial markets. Thus, during this last decade gold demand has increased – as has demand for other commodities. According to Gomaa, this is one of the reasons why Iraq should start exploiting its own gold and diamond reserves. This would help finance reconstruction of Iraq, and thus benefit the Iraqi population as a whole.