Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
Not even the country’s only fully mechanized gold mine, Gold Fields’ South Deep (pictured), is profitable at the moment .
South Africa’s miners, gold and platinum in particular, are facing a toxic combination of weak metal prices, intensifying labour disputes and the increasing cost of ever-deeper exploration.
The industry, once the backbone of South Africa’s economy is now in deep troubles, with at least four of the country’s top gold producing operating at a loss, data complied by Bloomberg shows.
“What you’re seeing in South Africa is a major margin squeeze,” Srinivasan Venkatakrishnan, chief executive officer of AngloGold Ashanti Ltd., the country’s biggest gold miner by market value, told Bloomberg. “If you do nothing, the future of South African gold mining always heads towards a declining trend.”
AngloGold Ashanti (NYSE:AU) (JSE:ANG), the world’s No. 3 gold producer, reported in August a net loss of $142 million for the three months ended June, compared with a loss of $80 million a year earlier.
Harmony Gold (NYSE:HMY) (JSE:HAR) did not do much better, as it logged a net loss of $352 million for its fiscal year ended June 30, while Gold Fields (NYSE, JSE:GFI) — the world’s seventh-largest bullion producer — reported an annual fall in second-quarter profit of 40%.
Experts believe that the troubles affecting gold producers in South Africa go way deeper than the usual cycles the mining industry experiences.
The country, which holds some the deepest and oldest gold mines in the world, needs to invest heavily in new technologies to reduce labour costs, increase efficiencies at gold extraction and be able to work 24 hours a day all year long. Currently, miners in South Africa work about two-thirds of the day, 275 days a year, recent data from the Chamber of Mines shows.
But even the country’s only fully mechanized gold mine, Gold Fields’ South Deep, isn’t profitable at the moment and the company has said it expects to begin making money by the end of 2016.
Gold prices dropped Wednesday to session lows around mid-morning in the U.S. December gold was last down $10.40 an ounce at $1,110.60.
