Roger Baxter, chief economist, Chamber of Mines
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S.Africa 2007 gold output at 255 to 260 tonnes
Allan Seccombe
Posted: Mon, 29 Oct 2007

[miningmx.com] -- SOUTH AFRICAN gold production will fall between 5.5% and seven percent in 2007 from the previous year as the sector continues to see declining output eroding its long-held position as the world’s leading source of gold.

“We have seen production so far this year down seven percent already year-on-year so you are probably looking at production of 255 to 260 tonnes for 2007,” said Roger Baxter, chief economist at the South African Chamber of Mines.

The Chamber will bring out 2007’s gold production data around April next year once the mining companies have all reported their production for the year.
production of 255 to 260 tonnes for 2007
South African gold output fell to its lowest level in 84 years in 2006 because of declining mining grades. Production in 2006 was 275,119kg in 2006, some 7.5% lower than the previous year.

China is vying hard for the number one spot.

Research and Markets said in a China Gold Industry report for 2007 that China is expected to produce up to 300 tonnes of gold a year by 2010.

“It is estimated that by 2010, China's gold output may be about 280-300 tons, and in the forthcoming five years, the annual growth rate of China's gold output may remain at 5% approximately,” the market researcher said.

At that rate South Africa will be knocked into second place, with the decline in production unlikely to be reversed any time soon.

“The expectation in the short term any way is that the slow down in South African production will slow because of the surge in capital investment in the sector as there’s a broadening and expansion of brownfield areas and opens areas for mining,” Baxter said.
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South Africa’s gold miners have unveiled plans to go deeper to source untapped gold sources. The mines, already the deepest in the world, will go down to 4.5 km below surface. This makes South African gold mines expensive and dangerous.

China had been tipped to overtake South African gold output this year.

“Whether South Africa is first or second is not really the big issue. Losing its position as the world’s largest gold producer is seen by some as a real negative, but I don’t think so. You must still recognise its significant contribution to the local economy,” Baxter said.

The South African gold sector earns 8.4% of the country’s merchandise exports, it accounts for just over one percent of GDP and it employs 160,000 workers.

Over the past 122 years, a third of the world’s recorded gold came from South Africa, which produced 50,667 tonnes of gold. At peak production in 1970, it produced 1,000 tonnes of the metal.

“No gold field ever been like the Wits Basin and there’s probably never going to be one to match it otherwise it would most likely have been found already,” Baxter said.

“Wits will remain important to South Africa. There is still significant gold underground, which over time the companies are opening up with increased capital expenditure,” he said.

An estimated 600 million oz of gold remain un-mined in the Wits Basin and companies need to find ways to work together with infrastructure and technology to access this, Gold Fields CEO Ian Cockerill has said.