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How obliging of South Africa's miners, unions, and government not to care about gold price suppression
They'll deserve what they get, but the rest of the country won't.
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South African Gold Industry Enters Final Phase of Slow Death
By Felix Njini
Sunday, December 9, 2018
Back in 1987, South African President Cyril Ramaphosa -- then a 34-year-old labor union leader -- led 300,000 black miners in a strike that symbolized resistance to the apartheid regime. Now striking gold workers face a less politically charged battle, but one they can't win.
The nation's 130-year-old gold industry -- which has produced half the bullion ever mined on Earth -- is locked in the final stages of a decades-long death spiral. Most of South Africa's gold mines are unprofitable at current prices.
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Dwindling output has cut gold's contribution to little more than 1 percent of the South African economy, down from 3.8 percent in 1993 -- the year before Nelson Mandela's African National Congress won the country's first democratic elections. While the industry's demise won't reverberate in the way it once would have, the mines minister has criticized Gold Fields Ltd.'s plan to cut jobs as the ruling ANC seeks to shore up its base before elections next year.
Mines run by Gold Fields and Sibanye Gold Ltd. have been halted by strikes over job cuts and wages respectively. Both producers cut their output projections for this year.
South Africa's gold industry now employs just over 100,000 people, less than a fifth of the number that used to power the apartheid economy. The economic and social impact of a further contraction in the industry will be magnified as every gold miner supports between five and 10 dependents, while creating two jobs elsewhere, according to the country's Minerals Council.
Higher wages and power prices, combined with the geological challenges of the world's deepest mines, will mean more job losses and less production in the country over the next five years, said Gold Fields Chief Executive Officer Nick Holland.
"When you work out the math, when you keep doing that year after year, you are going to go out of business very quickly," Holland said in an interview. "The industry will just continue to see a slow death." ...
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