British find the massive gold deposits in Uganda in the 1920s

[tonycat77]

Uganda says exploration results show it has 31 million tonnes of gold ore

Most of the deposits were discovered in Karamoja, a parched sprawling area in the country's northeastern corner on the border with Kenya.

www.mining.com

Assuming this extraordinary claim is true, Britain will have access to 12 trillion dollars in today's prices worth of gold.
I expect the logistical technology, extraction, refinement, etc will seriously reduce this ammount, let's assume they can only extract around 10% of that ammount.
Still 3.1 million tonnes of gold.
How does that change things in the long run?

 

[Fuzzy Dunlop]

As there is only 244,000 metric tons in circulation as of now

. . . it would seriously reduce the value of this find due to the fact of all this supply of Gold entering the market.

Supply and demand are a bitch . . . . unless you can find some way of keeping this 31m tonnes out of the market.

 

[RamscoopRaider]

Uganda says exploration results show it has 31 million tonnes of gold ore

Most of the deposits were discovered in Karamoja, a parched sprawling area in the country's northeastern corner on the border with Kenya.

www.mining.com

Assuming this extraordinary claim is true, Britain will have access to 12 trillion dollars in today's prices worth of gold.
I expect the logistical technology, extraction, refinement, etc will seriously reduce this ammount, let's assume they can only extract around 10% of that ammount.
Still 3.1 million tonnes of gold.
How does that change things in the long run?

Correction 3.1 million tons of gold ORE, which is not pure gold.

Uganda's estimate is that they might be able to get 320,000 tons of gold out of the 31 million tons of gold ore

So 10% is 32,000 tons, a lot but not nearly as much as you claim

 

[stubear1012]

I would assume that this would help Britain recover from the economic cost of WW1. It was my understanding that the economic cost of WW1 limited Britain's ability to deal with the Great Depression and to do rearmament in the early days of Hitler. This gold discovery will not make up for the large numbers of men lost in the war.

I do not know if this will help Britain modernize their industries. It is my understanding that there were problems with class structure of an upper class management versus the working class unions.

It would have been better for the world if Britain was stronger in the 30's and had taken a stronger stance against Hitler.

As always, these are my personnel opinions and I would be glad to see what other opinions people have.

 

[tonycat77]

Correction 3.1 million tons of gold ORE, which is not pure gold.

Uganda's estimate is that they might be able to get 320,000 tons of gold out of the 31 million tons of gold ore

So 10% is 32,000 tons, a lot but not nearly as much as you claim

32.000 tons, that's a hull of the titanic made out of pure gold.
Still let's assume they get it, what are the long term economic effects?

As there is only 244,000 metric tons in circulation as of now

. . . it would seriously reduce the value of this find due to the fact of all this supply of Gold entering the market.

Supply and demand are a bitch . . . . unless you can find some way of keeping this 31m tonnes out of the market.

Seeing how gas is now priced, despite more and more reserves being found, let's assume they still reduce the extraction rate to keep prices high.
Or print a lot of gold backed pounds, there would be no actual devaluation of money, since the gold that is backing it will come from those mines.

 

[Fuzzy Dunlop]

Seeing how gas is now priced, despite more and more reserves being found, let's assume they still reduce the extraction rate to keep prices high.
Or print a lot of gold backed pounds, there would be no actual devaluation of money, since the gold that is backing it will come from those mines.

The price of gas, as well as oil has increased due to the supply being curtailed due to sanctions but you're correct.

As for printing Gold backed £'s, what would the interest rate need to be/increased to for this though?

 

[alspug]

So considering the use of Gold to back the pound sterling you literally could see the British Government able to stockpile strategic resources and pay for all the refits on time and to the full extent of Warships. The funneling of obsolete aircraft to Malaya for example could instead see the Aircraft sold to China while more modern types are built instead. The Army may have been able to turn the Experimental Armour Force into a proper armoured division with SPG and SPGAA in the mid 30's.

Overall this would be a massive benefit to the British in the leadup to WW2 and even if for example they only get 1,000tons of gold out in the 30's thats still a huge difference.

 

[NedStark]

It would be a pain in the ass for gold hoarders once countries abandon the Gold Standard - see France.

 

[yulzari1]

Nice if some of it was spent on Uganda……….

 

[Peg Leg Pom]

Nice if some of it was spent on Uganda……….

It'll end up in Fort Knox paying for the war and after independence (delayed as long as possible) in the Swiss bank accounts of Uganda's dictators.

 

[Fuzzy Dunlop]

So considering the use of Gold to back the pound sterling you literally could see the British Government able to stockpile strategic resources and pay for all the refits on time and to the full extent of Warships. The funneling of obsolete aircraft to Malaya for example could instead see the Aircraft sold to China while more modern types are built instead. The Army may have been able to turn the Experimental Armour Force into a proper armoured division with SPG and SPGAA in the mid 30's.

Overall this would be a massive benefit to the British in the leadup to WW2 and even if for example they only get 1,000tons of gold out in the 30's thats still a huge difference.

And there's other possibilities!

An 1931 Railway Act making an earlier British Railways (not nationalisation) and thus allowing for a earlier modernisation program encompassing electrification?

An earlier building of a larger Motorway system across the UK?

Investing in UK shipyards thus allowing them to be viable even today building modern cruise liners and Emma Maersk style cargo ship?

Building dozens of extra 'New Towns' better depopulating cities such as London, B'ham, Manx etc.

Your imagination can run rampant on this one.

 

[thaddeus]

what were the British gold reserves of the era? France had 2,500t in their reserves, that had to be transported (quickly) out of Paris during the invasion in 1940.

 

[Issei Uzumaki]

Uganda says exploration results show it has 31 million tonnes of gold ore

Most of the deposits were discovered in Karamoja, a parched sprawling area in the country's northeastern corner on the border with Kenya.

www.mining.com

Assuming this extraordinary claim is true, Britain will have access to 12 trillion dollars in today's prices worth of gold.
I expect the logistical technology, extraction, refinement, etc will seriously reduce this ammount, let's assume they can only extract around 10% of that ammount.
Still 3.1 million tonnes of gold.
How does that change things in the long run?

Well as pointed out, the article says about 300k tons recoverable, so about 30k mined in your example. Let’s say they are able to get 1% of that per year, so about 300 tons. That’s still significant, per quick search the US today has about 8100 tons stored, so that’s a nice haul for UK.

Going by price of gold in terms of US value, 300 tons would have been about 180 million USD. So UK could begin paying off war debt just using gold, say about 100 million a year and the rest goes into general funds. For comparison, the UK still owed US 4.4 billion USD in WW1 debt when the depression hit OTL. you might actually be able to prevent a depression with this, only have bad recession.

 

[Catsmate]

Typically gold ores run 1-10ppm, i.e. 1 to 10 grammes per tonne.
So 31Mt ore suggests at most 310 tonnes metal, ten million troy ounces or, in the 1920s, perhaps fifty million pounds Sterling.

 

[naraic]

Ok looking at the economic benefits of a resource find is very difficult due to the nature of control. Finding 310 tons (or whatever amount) of gold doesn't mean a economic gain of 310 tons of gold to the British treasury.

Especially with the complicated and awkward way in which colonialism in many ways avoided taking profits back to the home treasury.

The kingdom of Buganda was a protectorate. So the local King (if there was one I forget) or tribal chiefs or whatever would be in position to extract quiet a amount of the largesse to their own finances.

Also the colonial government would have their own priorities that would be spent on as local civil servants build empires.

Then there is the cost of extraction and the cost of export. This is gold so we are probably talking about it travelling by rail in armoured trains to Egypt and being shipped onwards from there.

The imperial government gets taxes on profits or licenses after local authorities have taken a share.

 

[tonycat77]

Nice if some of it was spent on Uganda……….

The current agreement is for only 15% of the mines being owned by the ugandan goverment.
They just replaced the UK with China in 2020.

Ok looking at the economic benefits of a resource find is very difficult due to the nature of control. Finding 310 tons (or whatever amount) of gold doesn't mean a economic gain of 310 tons of gold to the British treasury.

Especially with the complicated and awkward way in which colonialism in many ways avoided taking profits back to the home treasury.

The kingdom of Buganda was a protectorate. So the local King (if there was one I forget) or tribal chiefs or whatever would be in position to extract quiet a amount of the largesse to their own finances.

Also the colonial government would have their own priorities that would be spent on as local civil servants build empires.

Then there is the cost of extraction and the cost of export. This is gold so we are probably talking about it travelling by rail in armoured trains to Egypt and being shipped onwards from there.

The imperial government gets taxes on profits or licenses after local authorities have taken a share.

Assuming the locals get 10% (As in OTL the goverment will only own 15% of the production), how much gold would land in the UK?, even it goes into the hands of others, they will still be british subjects, still purchase british assets, etc.
The economy would still massively benefit.

what were the British gold reserves of the era? France had 2,500t in their reserves, that had to be transported (quickly) out of Paris during the invasion in 1940.

From what i've seen that was the average ammount up to WW2.

 

[clifton]

Uganda says exploration results show it has 31 million tonnes of gold ore

Most of the deposits were discovered in Karamoja, a parched sprawling area in the country's northeastern corner on the border with Kenya.

www.mining.com

Assuming this extraordinary claim is true, Britain will have access to 12 trillion dollars in today's prices worth of gold.
I expect the logistical technology, extraction, refinement, etc will seriously reduce this ammount, let's assume they can only extract around 10% of that ammount.
Still 3.1 million tonnes of gold.
How does that change things in the long run?

Uganda likely turns into Rhodesia 2.0 with more white settlers and a more bloody Mau Mau war as it likely also attracts more white settlers into Kenya. Especially with the economic depression, I can definitely see large migration from Britain. A gold rush always attracts migrants.

 

[PMN1]

The article says 'Muyita said an estimated 320,158 tonnes of refined gold could be extracted from the 31 million tonnes of ore.'

How does refined gold differ from gold?

 

[Fuzzy Dunlop]

The article says 'Muyita said an estimated 320,158 tonnes of refined gold could be extracted from the 31 million tonnes of ore.'

How does refined gold differ from gold?

I stand corrected if wrong but I watched a program a couple of years ago.

They use cyanide and other stuff to purify it so to extract the Gold from the ore.

 

[naraic]

The article says 'Muyita said an estimated 320,158 tonnes of refined gold could be extracted from the 31 million tonnes of ore.'

How does refined gold differ from gold?

Refined gold is gold. Ore is rocks with gold within it.