BBC Asks: Is Sun Setting On South Africa’s Gold Mines?

July 15th, 2013 by

southafrica-gold

The BBC gives a good, even-handed overview of the perils and difficulties facing precious metals mining companies in South Africa. Trapped between ever-escalating expenses, the need to dig ever deeper to get to the remaining gold, and the tumble in gold prices, the mining industry is in no position to acquiesce to labor unions’ demands of up to 100% pay increases.

From the article:

Much of the easily accessible gold has already been taken out of the ground. That which lies in the deeper reefs is becoming increasingly costly and dangerous to get at. In addition to this, over the past five years, wages have increased by an average of 12.3% per year, compared with an average inflation rate of 5.9%.

During the same time, gold production fell by 21%. Last year, the average worker produced 1.18kg of gold. In 2007, that figure was 1.49kg

One result of the labor squeeze on mining companies may be accelerated mechanization of the mines, putting thousands out of work.