75% of South African gold mines unprofitable– mineral council– RT Business News

75% of South African gold mines unprofitable– mineral council

South Africa’s 140-year-old gold industry– which was when the world’s largest– is now facing a significant crisis. The country’s mineral council says 75 percent of cash cow are unprofitable or barely generating income.

The statement comes as the sector gets in wage talks with its employees. Around 200 company and staff member representatives are set to start the settlements on Wednesday. The variety of work stoppages in South Africa increased by eight percent over the previous two years to 132.

A shaft in Westonaria, South Africa © Mike Hutchings South Africa may impose law on black ownership of mines Motsamai Motlhamme, head of employment relations at the council, apparently said the parties require to”discover commonalities in the interest of the sustainability of our market.” The majority of the world’s inmost and traditionally wealthiest gold mines are clustered some 40 miles south-west of Johannesburg. The deeper they go, the more expensive and challenging the work of extracting the ore becomes. The council stated the mines are old, deep, with falling grades and productivity, and rising costs. As a result the market has lost 70,000 tasks over the previous 5 years. The cost of extracting the gold might soon surpass its value, specialists say.At its peak in 1980, mining represented one fifth of the nation’s GDP; the number now stands at about 7.3 percent. “Boosts without a commensurate enhancement in the gold rate, exchange rate, cost profile

or outputs will imply that the cost of labor as a part of general expenses will increase, and the variety of limited and unprofitable operations will increase,”the council said on Tuesday.South Africa’s Reserve Bank Deputy Governor Kuben Naidoo stated inflation in the country has actually accelerated fromthe seven-year low it reached in March and the rand’s (RSA national currency)plunge to its weakest in seven months might increase rate development.