South African strike spreads to gold mine

derryb

South Africa is the world's third largest producer of gold in the world.

costing the company 1,660 gold ounces of production a day

jmski52

It's an extremely hard job, fairly deep underground, and dangerous as well. I wonder what the mines in China and the US are like - easier to recover, I wonder?

(after seeing the output chart on ZeroHedge, I revised my question to exclude Canadian and to include the US. I didn't realize that the US was a significant gold producer now.)

roadrunner

Some of the Gold Fields and Harmony gold mines are up to 3 miles deep. I don't think the Canadian or Chinese mines are anything near that yet. Those South African mines
have been into production for decades and probably peaked back in 1970. No one currently seems to have it as tough as the South African mines with their required minority
ownership stakes, lack of infrastructure support, unreliable electricity, weak govt-political structure, and some of the deepest mines on the face of the earth. The all-in costs can
run $1200-$1600/oz on these deeper mines. Harmony reported a major loss last quarter which is hard to fathom at $1600 gold. Gold Fields profit was way down as well. The
typically reported "cash costs" per oz of gold don't include amoritization and depreciation as well as the intangibles (ie strikes, floods, cave ins, shutdowns, war, and govt takeovers).
Even at $1600/oz some of these older mines may not make a profit.

derryb

The issue is how will this affect supply/ price and will this trend spread to other mines impacting supply/price further? A metals black swan?

roadrunner

<< <i>The issue is how will this affect supply/ price and will this trend spread to other mines? >>



This powder keg could easily spread to all the SA mines. If you look at the price hits that SA miners AngloGold, Harmony, Gold Fields, and DRD took this past week
it's pretty clear all were affected. Miners that don't make money have their share price trend to zero. Harmony in particular set a new 46 month low this past week.
It's bullish for the price of gold. But even so SA only contributes a couple hundred tonnes of gold per year. That's still a drop in the bucket compared to the paper hedges
out there and otc gold derivatives ($450 BILL or in the 8,000 tonne range). 200-300 tonnes of gold pales to the existing above ground stock of 155,000 tonnes or even vs.
the Central Bank held gold reserves of 15,000-32,000 tonnes depending on whose accounting you believe. That 200-300 tonnes even is small compared to the yearly demand
changes in gold.


African miners

fastrudy

these are the four highest producing regions in the world:
china
South Africa
Australia
Nevada.

OPA

Following is a table of the world’s 10 biggest gold-producing countries ranked by 2011 output, compiled by London-based metals-consulting company CRU. Figures are in metric tons.


Country 2011 Output 2010 Output


1. China 380 341
2. Australia 272 260
3. U.S. 243 236
4. South Africa 221 209
5. Russia 205 197
6. Peru 156 163
7. Ghana 102 92
8. Canada 101 91
9. Indonesia 97 128
10. Mexico 82 72

roadrunner

Besides the issues mentioned above, there is litigation pending to sue the SA gold mining companies on behalf of 3,000 miners over silicosis. There's the potential to increase
this by 10X or even 100X.

lawsuit