South Africa’s National Union of Mineworkers, which represents about two thirds of gold miners in the country, will start a strike over pay from tomorrow.
South African gold mining companies are liaising with police regarding the strikes which are set to start tomorrow. The miners are liaising with police “on the highest level” to maintain peace, Charmane Russell, external spokeswoman for Chamber of Mines at Russell & Associates, told Bloomberg by phone.
There are concerns of unrest after the Marikana platinum massacre last year, when dozens of miners were shot dead by South African police in the worst mining violence in decades.
South Africa was throughout the 20th century and as recently as 1996, the world's largest gold producer at almost 17 million ounces. South Africa has in recent years become less important to the global gold industry. However, should supplies be further hampered it may impact the already, very tight physical gold market.
South Africa now ranks sixth in gold production year to date, on a pace of just more than 5 million ounces of annual production, just ahead of Papua New Guinea and behind China, Australia, United States, Russia and Peru.
South Africa produced over 1,000 tonnes of gold in 1970 but production has fallen an incredibly 75% , to below 250 tonnes in recent years (see chart above). This collapse sees gold production at levels last seen in 1922. This has happened despite the massive technological advances of recent years, more intensive mining practices and a far greater availability of capital.
Recently, the decline in South African gold production has been attributed to national electrical issues and power outages, operational delays, safety issues and industrial unrest. However, the scale of decline at a time when there has not been a corresponding decline in base metals mined in South Africa suggests that geological constraints may be leading to lower production of gold and other precious metals.
Other large gold producing nations are also seeing declines (see table below).
Peak oil is a phenomenon many will be aware of – peak gold remains a foreign concept to most.
Peak gold is the date at which the maximum rate of global gold extraction is reached, after which the rate of global production enters terminal decline. The term derives from the Hubbert peak of a resource.