South Africa May Never Again Be the World's Top Gold Producer

Source:

The London-based GFMS precious metals authority said gold production fell 8 percent in South Africa last year, while China's output shot up 12 percent from the year-ago to just over a 10th of the world's supply.

South Africa surrendered its crown as the world's biggest gold producer last year to China, marking a changing of the guard and confirming analysts' concerns about the country's dwindling ore grades.

Analysts say it is unlikely that South Africa will again become top gold miner, a position it has held since 1905, but doubt that its record output peak of 1,000 tonnes in a single-year in 1970 can ever be exceeded. "We have had declining production," Daniel Sacks, resources sector head at Investec Asset Management, said. "We are having to go much deeper to mine gold in this country, and the grades are getting lower as compared to China, which has newer ore bodies."...

With lower ore grades come rising costs as companies dig even deeper in a country that has the world's deepest mines. "We have a mature mining industry and costs have been rising as companies dig further underground," said David Davis, an analyst at Credit Suisse Standard Securities.

The London-based GFMS precious metals authority said gold production fell 8 percent in South Africa last year, while China's output shot up 12 percent from the year-ago to just over a 10th of the world's supply.

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