In a report on `Gold Mining and its importance to Sub-Saharan Africa and Heavily Indebted Poor Countries' it stated that the gold mining activities in this part of the world has been severely affected resulting in major blow to the economies of several countries.

``...there is ample evidence demonstrating that the fall in the price of gold in US dollar has already caused the closure or scaling-down of gold-mining projects in several countries, with consequent job and revenue losses. Projects in a number of countries have been abandoned or delayed because of the recent falls in gold prices. If the price slips further, the deterioration in the economic health of gold-richdeveloping countries can only worsen,'' the report stated.

According to the World Gold Council, in nine heavily indebted poor countries (HIPCs), gold accounts for at least five per cent of export revenues and another five countries are likely to join this group. Sub-Saharan Africa, which includes 33 of 41 HIPCs, currently produces 25.1 per cent of the world's gold.

Three quarters of it, 18.5 per cent, is produced by South Africa but the share of global output of the remaining countries has doubled since 1990.

The report also noted that the damaging effect of the gold price fall on these countries goes far beyond the immediate impact on export revenues. ``Gold-mining's multiplier effects bring additional jobs, wages and government taxes. Mining facilitates the growth of legal,physical and financial institutions," it stated.

IMF and developed countries received the wrath of World Gold Council on this issue of the southward movement of gold prices. It stated: ``The paradox is that the future growth ofthese nations is being undermined by precisely those who wish to proffer a helping hand -- the International Monetary Fund and the governments of some developed countries.''

The report noted that with the opening of the gold mining sector in the different sub-Saharan countries to foreign investments a new sector opened up for future investments.

``Many of the countries have become more attractive to overseas investors. Exploration by mining companies of promising areas has followed, sometimes resulting in mining developments. This trend is set to continue, though given the recent fall in the gold price, a question mark hangs over what might otherwise be a glittering future,'' it stated.

And with 30 nations out of the world's 41 HIPCs being gold producers, the price slump will affect these nations most. ``Sales and the threat of sales by central banks and the official sector are the single biggest factor preventing a price recovery.

This represents a major obstacle to the expansion of gold mining inunderdeveloped nations and thus diminishes opportunities for genuine, long-lasting and sustainable economic growth in gold-producing HIPCs,'' the report stated.

The council felt that if there is a perception that prices will continue to fall then the investments in this sector will be affected. ``Prolonged uncertainty about the outlook for gold prices is potentially as harmful to investment in gold mining as the fall in price that has already occurred,'' its report stated.