Gold: lowest production in South Africa since 1922

Les echos
today Jun 1, 2009
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The price of gold seems to be continuing its march towards $1000 an ounce, boosted concurrently by the persistent fragility of the economic situation and the expectation of inflation. However, what was until recently the principal country of the yellow metal, South Africa, is continuing to see its production decrease. The Chamber of Local Mines has published figures from the first quarter: 49.7 tonnes, down almost 5% on the same period in 2008 and 10% from the last quarter of 2008.

This decline is all the more significant as, one year ago, the South African auriferous industry suffered prolonged breaks in activity caused by the outbreak of an energy crisis without precedent. Between January and March 2008, the production of gold in the country dived 15.6% to 52.2 tonnes when compared to the final quarter of 2007 and by 16.8% on a year previous. The Chamber of Mines had then stated that between 15-20% of the fall should be attributed to the cuts in electricity. At the time, gold was traded at $920 an ounce.

If the tendency of the first quarter of 2009 is confirmed for the rest of the year, South Africa is on course for a total production of 200 tonnes, 20 tonnes less than the figures for the previous year; 2008’s figures were the lowest production figures recorded in the country since 1922. Furthermore, the quality of the mineral extracted has not ceased to be degraded.

The Union of Producers of Gold declared a drop of 6.9% in proprieties of the mineral treated, which, naturally, contributed to a plunge in volumes.

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