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Wednesday, 7th March 2007 (5234 views)

Gold production in South Africa is expected to fall again this year to its lowest level since 1992, according to recent reports.

As the biggest source of the yellow metal on the planet, the country can ill-afford another drop in production levels, although it seems to be following the trend of a 13.1 per cent drop last year with a 7.5 per cent reduction so far, according to Roger Baxter, an economist from the chamber of mines.

But Mr Baxter told Bloomberg that while the outlook for this year does not look ideal, the decline is slower than last year.

Much of this decline is being put down to the increase in costs at the South African mines and a lower grade of gold being mined.

Ian Cockerill, chief executive officer of gold mining firm Gold Fields, explained to Bloomberg: "The mines are getting deeper, more complex and costlier to operate, while the grades are declining."

He added: "The drop in production is a natural consequence of ore bodies that are very mature.''

 

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