JOHANNESBURG (miningweekly.com) – South African’s gold mines could face another 60 000 job losses by 2025, unless the industry starts engaging a shift in mining methodology, Ninety Eight Degrees Group consultant Graham Briggs says.

He told attendees at the Geological Society of South Africa’s Gold Day meeting on Friday that the country’s gold industry has been lulled into a false sense of security, as the gold prices over the last ten years shielded gold companies financially from cost increases.

Gold production has, however, continued to decrease year-on-year.

“At the moment, the industry is surviving. It’s not a good way to operate a business,” said Briggs, adding that the average cost of operating and sustaining capital expenditure meant that the sector would remain under “serious pressure”.

“Clearly, South Africa’s gold industry needs some radical reshaping if there is to be a future in it,” he pointed out.

Further, Briggs warned that, without a shift in mining methodology, the gold industry would fail to mine the orebodies profitably, leading to the sterilisation of resources being accelerated, premature mine closures and job losses. “It will be a disaster.”

Noting that nothing had changed in the gold mining industry in terms of mining methods over the last 20 to 30 years, Briggs argued that modernisation in the industry was not only essential for the industry to survive, but would improve the industry’s health and safety performance, while contributing to increased skills development, employment, exports and revenue, as well as having a knock-on effect on local communities.

If gold mines could break rock without having to blast, it could easily add more years. “But, there needs to be commitment from the mining companies to be willing to spend money on the machinery that is needed.”

Further, Briggs highlighted that through correct mine management and mechanisation, a mine’s life can also be extended. He cited Harmony Gold’s Unisel takeover in 1995, when the mine had five years of life-of-mine (LoM) left. “By applying modern management practices, the mine still has five years LoM, 22 years later,” he quipped.

However, he noted that there was a “modernisation trust-deficit” in industry, which called for the need of a fresh start in stakeholder relationships, given that it is in the interest of the country to exploit its gold resources optimally.

“The final aim is to have a mass inclusive transformation model,” said Briggs, highlighting steps that mining companies could take to manage these issues proactively.

This included honest and transparent negotiation, considering the bigger picture and committing to invest in growth and sustainability in the appropriate economic environment.

“The gold price is not going to be the saviour of gold mining in South Africa,” he concluded.