In terms of wealth of natural resources, South Africa is comparable to Israel. In 2009, the Western Asian country struck oil when a team of geologists drilled the Earth somewhere in Jerusalem. Now, Israel is putting more efforts in its newly-found reserves - looking for partners to extract all the oil in the country.
The only difference between South Africa and Israel is that the former, despite having vast resources of gold, seems to have very little intention of improving the working conditions and operations of its mining industry. Precious metals investment site Bullion Vault reports that South Africa’s yearly gold output has halved since 1998, and this is partly because most of the easy gold has been mined out of the Earth.
But despite the dwindling numbers of easy-to-mine gold, South African mining companies should’ve been able to find a way to mine deeper into the Earth by now, what with the amazing advancements of technology today. Perhaps the reason why the gold mining industry hasn’t picked up in South Africa yet is because of neglect.
It has been 16 years since its gold production declined sharply and no one, save AngloGold Ashanti, has found a way to prolong the lives of mining sites through new technology. In addition, mining in South Africa is still dangerous, and operational hazards tend to scare away investors.
Mining in South Africa is the main driving force of the country’s history and development. From being number 1, Africa declined to number 5 in gold exports. ANC secretary Gwede Mantashe has taken steps in reviving the mining industry in 2013 by revoking licenses of mining sites with illegal operations. However, mining operations in the country still isn’t picking up.
If South Africa wants to be number one again, there’s no better time to strike more gold than now. If South African mining companies want to produce more gold, they should put more effort on creating a new technology to mine more ores underneath the Earth’s surface. Gold mining operations are expensive and spot prices of gold are declining today.
However, mining companies should be able to break even if the demand is high from other countries. China and Russia are both hoarding gold for several years now, and South Africa would benefit from their demand the most. China’s investment, jewelry, and industrial sectors are on the rise, especially now since gold prices are on the decline. Russia, on the other hand, has been on a gold-buying spree since defaulting on local debt in 1998.
