South Africa’s 140-year-old gold industry – which was once the world’s largest – is now facing a major crisis. The country’s mineral council says 75 percent of gold mines are unprofitable or barely making money.
The announcement comes as the sector enters wage talks with its employees. Around 200 employer and employee representatives are set to start the negotiations on Wednesday. The number of work stoppages in South Africa increased by eight percent over the past two years to 132.
Motsamai Motlhamme, head of employment relations at the council, reportedly said the parties need to “find common ground in the interest of the sustainability of our industry.”
Most of the world’s deepest and historically richest gold mines are clustered some 40 miles south-west of Johannesburg. The deeper they go, the more expensive and difficult the work of extracting the ore becomes. The council said the mines are old, deep, with falling grades and productivity, and rising costs. As a result the industry has lost 70,000 jobs over the past five years. The cost of extracting the gold may soon exceed its value, experts say.
At its peak in 1980, mining accounted for one fifth of the country’s GDP; the number now stands at about 7.3 percent.
“Increases without a commensurate improvement in the gold price, exchange rate, cost profile or outputs will mean that the cost of labor as a portion of overall costs will rise, and the number of marginal and unprofitable operations will increase,” the council said on Tuesday.
South Africa’s Reserve Bank Deputy Governor Kuben Naidoo said inflation in the country has accelerated from the seven-year low it reached in March and the rand’s (RSA national currency) plunge to its weakest in seven months may boost price growth.
https://www.rt.com/business/432671-south-africa-gold-crisis/
Nice progoganda piece!!
sure they are, …
nothin ta see here
It doesn’t say if the mines were forcefully taken away from the white owners and given to black owners by the government…so many properties and farms have suffered this fate. It would explain why they’re no longer profitable.
…but they didn’t shut them down because they were so concerned for the employees…
BAHAHAHAAHAAHAAAA!!!!!!! Riiiighhhttt…
Cut me a F’g break. Or an arm or something.
actually, there’s something here. read between the lines. if you follow the silver market, you know that it is absurdly low. for an element that is used for more than just jewelry. now we’re being told that it is now gold. it might be true, that inflation has risen faster than gold spot can keep up. there are so many angles here that it might be worth paying attention to.
my reading of gold(or silver) in terms of it’s relation to inflation is that it always reflects the actual cost of mining it with a modest profit margin. but that would be different from region to region. are we seeing real inflation differential in sa or is this just a bogus attempt to raise prices? or is this a way to game the price of gold worldwide?
plata o plomo?
S. Africa ain’t the only place. Gold/silver have been forced so low by Central Banks to hide the value-loss of the US Dollar. When gold hit nearly $2000/oz, and silver was in the $50’s, the first MAJOR sell-off came from paper gold sales BY CENTRAL BANKS.
The trade was too large to have come from anywhere else.
PLUS – by driving down gold to, at one point, about $1050 or so, it allowed the US to buy back PHYSICAL GOLD, to replace that which was looted by banks and our worthless government.
Witness the repatriated German gold. Correct markings – but much of the gold was ‘new’ – and if you go look for pics, you can see a substantial difference in patina/age.
Even mines in the US and Canada complained, so gold was raised to $1250-ish, which jussssst alllows commercial mines to operate at a profit.
NOW – segue to rhodium.
Never heard of it?
Exactly. Most people haven’t. Completely unconnected to or spoken about against the Dollar.
Rhodium, a few months ago, was bid at $600, ask was $800. A VERY odd spread. Very disproportionate.
Now, less than 6 months later, rhodium is $2300.
So no, S Africa, despite politics, will have trouble, like most gold/silver mines, thanks to, once again, the ‘good ol’ USA’ and the Rothschild banks.
Because either employees (not the miners, but the administrators) are stealing the gold or the govt. is stealing it from the companies, or both. Because it is clear stealing in South Africa is becoming standard operating procedure, govt. sanctioned or not.