South Africa Gold Production Declining

South Africa Gold Production

Even though South Africa has been the leading producer of gold for most of the 20th century, in the 21st century they aren't faring as well, as they've dropped to the No. 4 position globally.

In 2009 gold production in the country fell to under 205 tons for the year. Aging gold mines are the principle culprit in the reduced South African gold production.

To give an idea how quickly this is happening, in 2008 the production levels were down by 14.5 percent, while in 2009 it fell a further 5.8 percent.

There's only one factor going on here, and that is that the country is simply starting to run out of the metal with no new, significant gold mines waiting in the wings.

The top three gold producing countries in the world are led by China, and then the United States and Australia.

What could be good news is this could increase the price of gold which isn't expected to diminish in demand for some time.

South Africa Gold Production

DRDGOLD: South African Gold Miner Cutting 1,335 Jobs

DRDGOLD, the fourth largest gold producer in South Africa announced it is cutting 1,335 jobs at it shut down a mine east of Johannesburg.

The workers losing their jobs are part of a contingent that labored at the ERPM mine that closed in October for maintanence related to underground water problems. The ERPM mine had to be shut down underground as the pumps used to handle the underwater situation could get rid of the rising water levels fast enough, making it impossible for mine workers to continue.

According to DRDGOLD, they've transferred some remaing workers to other operations, while other accepted volunatary retrenchment.

The gold company added there was no way they could continue gold mining operations, as it is beyond the financial means of the company to retain full time workers at an operational level.

Gold mining in South Africa is the major export for the country, being 9 percent of overall export earnings for the South African economy.

DRDGOLD and the overall South African gold mining industry continues to be under pressure, as more job cuts will come until operations are improved.

Electric Grid Continues to Hamper South African Gold Production

As usual, the state-owned electric utility Eskom is not able to fix the problems related to powering up the lucrative precious metals business in South Africa, causing gold production in the country to plunge by 14.4 percent from October of last year during the same month.

The good news is at least in the general mineral market they're doing better, as production has risen by 3.5 percent during October.

Eskom has cut back on power supply to around 90 to 95 percent at this time to the mining companies.

Gold Fields shuts Driefontein Mine after Worker Death

Gold Fields, which is the fourth largest gold producer in the world, closed down its Driefontein mine after some tremors caused the death of one worker, and trapped another one in the mine. Four other workers were injured in the incident.

In the past Gold Fields has said they would stop mining if they couldn't improve their safety record, as they're at the bottom of safe mining companies; the worst in the business.

South Africa is also terrible on mining safety, as so far this year 140 workers have perished in the mines, while last year 221 died, and in 2006 200 died in the country.

At this time the company has no idea when they'll bring the mine back online, as their focus is on finding the missing worker trapped in the mine.

Along with South Africa, Gold Fields also operates mines in Peru, Ghana and Australia.

AngloGold to Post Loss on Quarter Ending June 30

AngloGold Ashanti Ltd., the largest gold producer in Africa, will probably post a loss of $3.43 (25.46 rand) for the quarter ending June 30, according to four analysts surveyed. Last quarter they posted 2.88 rand in earnings. They'll release their earnings on July 31.

In the second quarter the company suffered a $1.1 billion before tax loss after forward sales were cut by 39 percent in the first half. AngloGold has the largest hedge book (forward sales) of any gold producer in South Africa. If gold gains in price, the hedge increases along with losses.

Major rivals Gold Fields LTD and Harmony Gold Mining Co. are expected to post a profit for the quarter.

South African utility problems still continue to allow the mines to run at 90 percent of regular consumption.