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BL Premium writes that the state of SA’s gold mining industry is worse than first thought, with fewer than 20% of gold mines making money at prevailing prices of about R520,000/kg.
Data from the Minerals Council SA (MCSA – formerly called the Chamber of Mines), released as wage talks in the sector kicked off, showed that 80% of SA’s gold mines are unprofitable. Large job cuts are forecast in coming years, following decades of steeply falling employment. As Gideon du Plessis, general secretary of Solidarity, pointed out, the MCSA had as usual opened wage talks by painting a gloomy picture of the industry to motivate for the lowest possible wage increase. But analysts have warned that costs are simply too high for SA’s ageing deep-level, labour-intensive mines. The country’s gold output could halve within five years from the 140 tonnes it generated in 2017, Nedbank gold analyst Leon Esterhuizen predicted. According to his calculations, just six out of SA’s 26 gold mines were making money, with only four of those six “comfortable". Esterhuizen went on to state: "I think this industry is done. Some people will say that’s nonsense and a weak rand will save us. Not even a weaker rand will save us.” He added: "The drop in productivity is a function of the companies cutting back volumes faster than people, which is an indication you will see significant numbers of people retrenched in the next couple of years."
- Read more of this BL Premium report by Allan Seccombe at SA Labour News
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