Unless there is another significant gold discovery in South Africa, nothing can be done to reverse the decline in local gold production, says scenario planning consultant and former Anglo American executive Clem Sunter, who delivered the afternoon keynote address at the Tenova Mining and Minerals Symposium, in Johannesburg, earlier this month.
Speaking to Mining Weekly on the sidelines of the symposium, Sunter emphasised the need for the mining industry to employ the latest prospecting techniques to search for that next depo- sit, which is likely to be more than 2 000 m below surface.
“Finding new gold deposits is the only way that South Africa could regain its title as the number one gold producer in the world,” he said, further suggesting that government should incentivise international junior exploration companies to search for gold in South Africa, as they had been more successful in other mining-focused countries, like Australia and Canada.
“I don’t think the local mining industry has the energy to find the next big deposit, so it’s up to the junior explorers, who seem to be better at it.”
He also pointed out that, in the days of Anglo American founder Sir Ernest Oppenheimer, geologists were handsomely rewarded for their discoveries, but that was not the case anymore. “Junior exploration companies should be employed to search for new gold reserves, as they would benefit more from a new discovery,” he said.
Sunter further mentioned that South Africa was running out of orebodies, while the current grades were declining. “While we used to mine between eight and ten grams of gold per ton, the current grades are between three and five grams per ton, which is why the only thing that could lead to a significant boost in South Africa’s gold production is finding another big reserve in the country,” he said.
Meanwhile, financial advisory firm Invest- ment Solutions chief economist Chris Hart, who delivered the symposium’s morning keynote address, told delegates that South Africa still had an abundance of gold reserves in the ground and that, if the country set out to save the gold mining industry, it could still benefit from gold’s economic contribution for another 100 years.
He did point out, however, that South Africa had fallen from being the world’s number one gold producer to being number six, with a mere 6% contribution to global gold production – a contribution that used to be 68%.
He also warned that the industry was in crisis and that, in the last decade, the country’s gold production had declined at a rate of 8.2% a year, or 83% overall.
Last year, gold production in South Africa fell to 167 t – the lowest level since 1905.