Gold News

Violence in South Africa threatening gold mines

Recent spates of anti-immigrant violence that have affected South Africa are also having negative affects on the gold mining industry, causing international investors to drop out and output levels to fall.

The country has already been experiencing difficulties in infrastructure, with many power cuts interrupting production since January.

However, the African Press reports that the recent violence, which has left at least 42 dead and 16,000 displaced in 12 days of rioting, is dealing a further blow.

Frans Baleni from the National Union of Mineworkers said that the Primrose Gold Mine has not been in operation since May 19th, while DRD Gold and Pamodzi Gold have also been having production problems due to absent workers.

"Companies are starting to realize that the risk profile of the country is changing," said Claude Baissac of the US company NSA Risk Management Services.

Earlier this month, Gold Fields, the country's second largest producer of the precious metal, announced that its profits have fallen.

This could be good for gold prices since demand is still high.

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