oil intensity in many countries and more credible monetary policy frameworks. however, oil and food prices have been the driving forces of recent inflation developments in south africa and pose the major upside risks to inflation both here and abroad. monetary responses to terms - of - trade shocks such as oil price increases are not straightforward and depend in part on the magnitude and duration of these shocks. in essence, the issue boils down to distinguishing between permanent and transitory changes in these prices, and how the first - and second - round effects are likely to influence future inflation outcomes. in general, central banks are not likely to change monetary policy in response to commodity price fluctuations. monetary policy should address the risks emanating from possible second - round effects, i. e. adjustments in expectations triggered by movements in commodity prices which may exert an impact on the inflation process. 7. conclusion not surprisingly, in our uncertain world, there are conflicting views on the outlook for commodity prices. some believe that commodity prices will fall back to their long - term declining trend. others however, foresee a sustained boom, or at worst a levelling off at higher levels, given the ongoing industrialisation in china and other emerging - market countries. whatever the future course of commodity prices, there is little doubt that it will have an impact on our economy. in essence, the policy responses will depend on the macroeconomic impact of the price movements. in this regard, the effect of commodity price movements on inter alia the trade balance, aggregate demand, exchange rate and fiscal developments are of paramount importance. from a monetary policy perspective, our key concern is the possible impact on inflation. food and oil prices are likely to remain an upside risk to the inflation outlook in south africa. monetary policy has to be sensitive to the impact of these developments on inflation expectations and we will act appropriately to prevent the emergence of more generalised inflation. the south african reserve bank remains committed to its primary mandate of ensuring price stability, that is the maintenance of cpix inflation between the target range of 3 to 6 per cent. finally, commodities will retain a central role in the south african economy in the future. a challenge facing our country, and one that is of particular relevance to this audience, is to ensure that women also play their rightful role in this area of economic activity. to this end the recognition of the achievements of women plays a significant role in fostering their interest in all sectors of the domestic economy. thank you.

mines, in 2005, approximately 55 different minerals were produced from 1 113 mines and quarries, of which 45 mines produced gold, 29 produced platinum - group minerals, 64 produced coal and 202 produced diamonds. mining, therefore, remains a key foundation of the south african economy. in 2005 mining made a direct and indirect contribution of approximately 15 per cent to gdp, accounted for around 50 per cent of merchandise exports ( including primary and beneficiated mineral exports ), 12 per cent of fixed investment, 30 per cent of the market value of the jse limited and 20 per cent of formal - sector employment. however, it is important to note that an abundance of resources has not always implied a prosperous economy. this is particularly true for many resource - rich african countries, which until recently have not benefited from their resource endowments. natural resources are also not a prerequisite for growth. countries such as japan and switzerland with few natural resources have at times outperformed countries with a wealth of resource endowments. in fact, having natural resources is sometimes regarded as a curse. as far back as the 1950s, prebisch and singer postulated the secular decline of terms of trade of commodity - producing countries. the essence of their argument was that commodity prices had a tendency to decline over the long term. this, until recently, has been largely borne out by empirical evidence. in the last 140 years there have been 18 commodity cycles, with slumps being more persistent than booms. in some instances in sub - saharan africa, commodity price slumps have lasted over 30 years. however, since 2001, as commodity prices have boomed, we have witnessed impressive economic growth in many of the resource - rich african countries. notwithstanding the structural shift from a commodity - based country to a more services - oriented one, south africa has also experienced a concomitant increase in growth over this period. 3. commodity price movements over the last five years during 2001, the overall commodity index as measured by the international monetary fund began to increase steadily. this increase has continued well into 2007, particularly in the case of energy and metals. not only have the increases been more persistent, giving rise to the super - cycle hypothesis, but the surge has been larger than in previous cycles. increases have also differed significantly across commodities. for example the price of north sea brent crude oil increased from around $ 19 per barrel in 2002 to around $ 72 per barrel in june 2007, having peaked at almost us $ 80 per barrel in