of jobs in gold mining receded from 476 000 in 1980 to 175 000 in 2004, while in platinum mining it roughly doubled from 77 000 to 151 000 over the same period. over the past decade, the contribution of gold mining to total gross domestic product declined from 3, 2 per cent in 1994 to 1, 5 per cent last year. at the same time platinum mining ’ s contribution rose from 2, 0 per cent in 1994 to 2, 3 per cent in 2004. for all mining sectorscombined, the share in the total value added to the economy receded from 9, 5 per cent in 1994 to 7, 3 per cent last year. more recently, chamber of mines data indicate that south african gold production in the second quarter of 2005 fell by 2, 4 per cent from the first quarter and by 18 per cent year - on - year. these declines reflect the industry ’ s adjustments to the current economic environment and the restructuring that has occurred over the past three years. although the substantial increase in restructuring costs has resulted in losses for the industry, given that most of the restructuring has taken place, the chamber of mines expects the associated costs to decline going forward. this is a welcome development indeed. the exchange rate is often seen as a source of the mining sector ’ s difficulties. the necessity to adapt to these new and changing circumstances has impacted not only on the mining sector but on all exporting sectors. despite the mining sector ’ s difficult circumstances, south africa remains the world ’ s largest producer of gold and platinum. 3. the south african reserve bank and gold the south african reserve bank has historically been an active participant in the gold market. originally all newly - mined gold had to be offered for sale to the bank within 30 days of production. subsequently the chamber of mines negotiated the right to sell south african gold independently of the bank in beneficiated forms of one kilogram and less. these direct sales were restricted to one - third of the annual production. after lengthy consultation, a sea - change in these arrangements occurred when the minister of finance announced on 12 december 1997, in a further relaxation of exchange control regulations, that south african gold producers may elect to sell their total output provided the bank had given the necessary exemption from the relevant exchange control regulations. this led to a gradual but dramatic decline in the bank ’ s transactions in the bullion market. notwithstanding this, the bank continues to be keenly interested in the health of the bullion market. this is

by virtue of south africa ’ s significant gold reserves both in the vaults and underground. the sarb also remains active in the various forums where the issue of central gold reserves management is explored. the most prominent of these forums is organized from time to time during the annual meeting of the world economic forum in davos, switzerland, where producers and central banks discuss the prospects for gold. the general impression that we have gained from these discussions is that the significant central banks which hold gold are very conscious of the impact that their gold sales programme have on the gold price and as such would not want to disrupt the market or cause unnecessary price volatility. the swiss central bank for example has handled their gold sales in a transparent, honest and exemplary manner. their programme was pre - announced and followed to the end accordingly. there is some uncertainty however about what would happen in germany when the new government starts to function. we can only hope that the current approach adopted by the bundesbank will continue. so the prospects for gold from a central bank perspective is good. a colleague of mine is participating in one of the panel discussions scheduled for tomorrow and he will enlighten you on the bank ’ s management of gold reserves. but, allow me to make the following brief comments. the bank holds around 4 million fine ounces of gold in its foreign reserves. it has held this net figure stable for the past number of years. gold is, obviously, an internationally acceptable reserve asset. the bank is very comfortable holding these gold reserves because of the metal ’ s war - chest qualities, 1 because gold is no - one ’ s liability, and because it allows prudent diversification in the bank ’ s total reserves. whilst not being a signatory to the central bank gold agreement, we abide by the spirit of this agreement in the management of the bank ’ s gold reserves. as i have mentioned, we are very satisfied with the level of our gold holdings. indeed, as part of our reviews on the composition of total reserves, we may even consider increasing our gold holdings. 4. recent economic developments the south african economy has been in an upswing since september 1999, making it the longest business cycle expansion phase on record. during this upswing growth in real gross domestic product has averaged approximately 3½ per cent per annum. recent data indicate that the sustained growth in real production is also being reflected in some very welcome gains in employment, although the unemployment rate of 26½ per cent remains very high