Wednesday, 25 September 2013

The end of an illustrious era for South African gold mining

World Gold '13 starts tomorrow in Brisbane. MEI consultant Dr. Mike Adams will be reporting and it will be interesting to see what the general mood is, and how delegate numbers have been affected by the fall in gold price over the past year. Mines all over the world have suffered, but perhaps none more than those in South Africa.
South Africa's gold mining history began in the late 19th century, with the discovery of relatively small deposits in Mpumalanga (see posting of September 21st), but when the prospector George Harrison discovered the outcropping Witwatersrand reef on Langlaagte Farm in 1886 it heralded the dawn of a long era in which gold mining and South Africa would become synonymous.

Although incredibly rich, the goldfields were from the start difficult to mine, requiring deep shafts and high capital investments. Experts in deep mining were drafted in, notably from Cornwall, whose tin mines at that time were the deepest in the world. The shift of economic dominance from the British Cape to the Boer Republic of the Transvaal made gold the catalyst for the Anglo-Boer War and the eventual formation of the Union of South Africa.

South Africa dominated world gold supply throughout the 20th century. I remember that in my early days at Camborne School of Mines virtually every graduate was snapped up by the South African gold mining companies, and I often look back and wonder how the press did not get wind of the fact that this small mining college in the remote south-west of England was training and supplying British students for the Apartheid regime.

In 1970 80% of global gold production was from South Africa. Now it produces only 6% of the world's supply. Only a decade ago South Africa was the world's number 1 producer, now it ranks only 6th, behind China, Australia, USA,  Russia and Peru,  with Canada set to overtake within the next few years at the current rate of decline.

It looks highly unlikely that gold will ever again dominate South African mining. The mines are old and deep and reaching the end of their economic lives, and there is little incentive for massive capital investment. The gold and PGM mines are facing increasingly violent labour disputes, with demands for very high wage increases stimulated by inter-union rivalries.

Unfortunately nothing lasts for ever. Cornwall was once the world's largest producer of copper and tin, but now not a single copper or tin mine survives in the county. Coal was once king in Britain, but all that ended with Margaret Thatcher in the mid 1980s. Coal is now king in South Africa in terms of annual sales value, with platinum second and gold languishing 4th behind iron ore. The decline of the highly labour intensive gold (and platinum) mines must be a cause for great concern for South Africa, where metals and minerals contribute greatly to export earnings and gross domestic product.

1 comment:

  1. Russia and Peru, with Canada set to overtake within the next few years at the current rate of decline.Gold & Silver Education


If you have difficulty posting a comment, please email the comment to and I will submit on your behalf