Precious metals have performed well as an investment in the last 20 years. The main reason being that they are finite resources, and gold production from the top gold producing countries, has decreased. South Africa, previously one of the top gold producers in the world, has seen a decline in their gold production since 1970. In the last 30 years, there have been no significantly large new gold discoveries.
The easily accessible gold has been mined. Some South African miners such as AngloGold Ashanti's Mponeng gold mine, located south-west of Johannesburg, is currently the deepest mine in the world. The operating depth at Mponeng mine ranged from between 2.4km to more than 3.9km below the surface by the end of 2012. Ongoing expansions have resulted in deeper digging at Mponeng, pushing the record to beyond the four kilometre mark.
Historically, top gold producing countries have been declining in gold production, whilst China and Russia have been increasing. These two countries do not export their gold.
The Charts above : The decreasing importance of gold mining in South Africa
Monthly gold production reached a new monthly low in January, according to data released by Stats SA1. Although a number of temporary factors might have contributed to the unusually low level, general historical trends show that gold has lost the prominent place it once had in the South African economy.
Stats SA has published comparable mining production indices that go back as far as January 1980, for the industry as a whole as well as for various minerals, including gold, iron, platinum and coal. The indices provide an indication of the level of production, set against a particular base period. Currently, the index has been set to 100 for the base period of 2010.
Historical values of the gold index show the extent of how production has fallen. In January 1980, the index was 359,0, while the volume of gold produced was far lower in January 2015, resulting in the low index of 48,4. In other words, South Africa produced 87% less gold in January 2015 compared with the same month in 1980. Figure 1 shows how the monthly gold production index has fallen. What is not shown in the graph, however, is that production started on its downward trend well before January 1980.The fall in production has reduced gold’s contribution to the South African economy. The metal contributed 3,8% to gross domestic product in 1993, falling to 1,7% in 20132. In terms of sales, gold made up 67,0% of all mineral sales in 1980, falling to 12,5% in 2014.
Coal currently leads the pack, having contributed 27,0% of total mineral sales in 2014.
South Africa has also fallen in global gold production rankings. Prior to 2007, the country held the number one spot as the top gold producer in the world, according to the U.S. Geological Survey Mineral Resources Program3. By 2014, South Africa had dropped to sixth place, according to Thomson Reuters GFMS4, falling behind other countries such as Peru, USA, Australia, and Russia.
So with the waning importance of gold to South Africa, does the future hold any promise for the industry? One estimate suggests that the country will soon need to look beyond the precious metal as a major resource. Stats SA’s 2014 Environmental Economic Accounts Compendium5 provides 2011 estimates on depletion rates for various minerals. At current production levels, South Africa will exhaust its coal resources in 119 years, and platinum in 218 years. For gold, resources will be exhausted in only 33 years. An update to the Compendium is due for release before the end of this month, containing new depletion estimates, but if this estimate holds true, many South Africans alive today will see the country taking on a much reduced role on the global gold mining stage.
Source:Stats South Africa
China is currently the worlds' top gold producer. The gold producing counties are listed below and notice how South Africa has moved to the 7th position as of 2016.
Source : Wikipedia
Top 10 Gold miners Production and AISC 2016
Top 10 Gold producing Gold Miners and their all in sustaining costs ( AISC ) of mining for Gold.
Use of the "all-in sustaining costs" (AISC) measure of gold production is on the rise, as it provides a more comprehensive look at costs than the traditional "cash cost" approach.
The AISC measure, finalized in June and supported strongly by the World Gold Council, includes other expenses such as general office spending and capital used in mine development and production to create a benchmark of a company's operating efficiency.
Source : Mining.com
World Gold Production
WORLD’S DEEPEST GOLD MINE
In fact, they will even suspend themselves 2.5 miles into the Earth – braving extreme temperatures, armed thieves, and constant seismic activity – just to mine a 30-inch gold reef.
The Depths of the Witwatersrand
If you own any gold, there is about a 50% chance it comes from the Witwatersrand Basin in South Africa. Gold was first discovered there in 1886, and it is speculated that the discovery may have only been possible because of an asteroid impact. The Vredefort crater, the world’s largest impact crater at about 200 miles in diameter, is now 2.02 billion years old and potentially helped reveal the Witwatersrand gold outcrops.
The Mponeng gold mine, located west of Johannesburg and owned by AngloGold Ashanti, takes advantage of some of the deepest and richest areas of this deposit. Mponeng also represents the extent to which people are willing to go to take advantage of this region’s unparalleled mineral wealth.
Each day, roughly 4,000 miners take the plunge to get to the bottom of the mine. The journey includes taking the world’s tallest elevator, which hits a top speed at 40 mph, to make their way down.
That far into the Earth’s crust, conditions are intense. Rock walls in the Mponeng mine reach temperatures of 140°F (60°C) and humidity levels often exceed 95%. To keep things cool, the mine uses a novel cooling system to manage temperatures. Over 6,000 tonnes of ice slurry are pumped into underground reservoirs, and giant fans help to spread the air flow.
Every day, about 5,000 lbs of explosives are blasted in the mine, and 6,400 tonnes of rock are excavated.
Breaking New Ground
Gold production at the world’s deepest gold mine has been declining each year, so miners going even deeper to try and get gold.
The continued search for gold in Mponeng has led to scientific discoveries. A bacterium called Desulforudis audaxviator was found in groundwater – and it’s quite unique. The bacterium exists independently from the sun, using energy from natural radioactivity to create food. Some experts think that similar life forms could exist on other planets.
The wealth of the mine has also created an unusual crime problem. Armed, illegal miners called “ghost miners” descend into the mine for months at a time, which turns their skin pale due to a lack of sunlight. This has helped create an underground (pun intended!) marketplace, where legitimate miners profit from the ghost miners’ existence. They can sell a $1 loaf of bread for $12 underground, where it is in high demand.
At the bottom of the world’s deepest gold mine, there is a 30-inch seam of gold called the Ventersdorp Contact Reef.
This is what the miners came for, but soon they will have to dig even deeper. In fact, plans are already in place to tap into neighboring gold reefs, which would extend the life of the mine beyond 2040.
Source : Money Project