Gold News

Gold production in South Africa 'may never recover'

A senior figure a MacQuarie First South Securities has claimed today (November 14th) that gold production in South Africa will only stay flat in the next one or two years, if it recovers at all.

Official data from Statistics South Africa revealed this week that gold output in the country plummeted by 17.7 per cent during September on a year-on-year basis.

Now Dave Hall, a top gold analyst at the firm - which has one of the largest equities research and sales teams dedicated to the Asia Pacific region - has explained that the situation may improve, but that would mean no increase or decrease in production.

He also explained in an interview with Mining Weekly that safety has played a crucial role in the decline, with the mining industry in South Africa recording a total of 140 worker deaths from accidents so far in 2008.

In addition, the world's fourth-largest gold producer, Gold Fields, has seen production cut at its Kloof mine by 30 per cent, mainly as a result of ongoing work to repair its main shaft.

Meanwhile, another analyst, who did not wish to be named, told Mining Weekly that lower grade material is being mined and getting more distant from the shafts, thus pushing up production costs.

"I don't think it [gold production] will go up, ever, even if gold goes very high to $1,000 or more," he commented.

A sustained decrease in gold production would be a huge boost to anyone with a gold investment, as it would undoubtedly push gold prices higher as demand outweighed supply.

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