The stunning collapse of gold production in South Africa
The latest production numbers for gold production in South Africa further confirms the yellow metal’s decline in South Africa.
Statistics South Africa newly released data says gold production during the last three months was down 5.9%. From Nov 2014 to Jan 2015 the seasonally adjusted base was 74.4 compared to 79.1 that was produced from Aug 2014 to Oct 2014.
The drop is not a blip but part of a larger trend that goes back several decades, writes an analyst for the statistics agency:
Historical values of the gold index show the extent of how production has fallen. In January 1980, the index was 359,0, while the volume of gold produced was far lower in January 2015, resulting in the low index of 48,4. In other words, South Africa produced 87% less gold in January 2015 compared with the same month in 1980. Figure 1 shows how the monthly gold production index has fallen. What is not shown in the graph, however, is that production started on its downward trend well before January 1980.
The fall in production has reduced gold’s contribution to the South African economy. The metal contributed 3,8% to gross domestic product in 1993, falling to 1,7% in 20132. In terms of sales, gold made up 67,0% of all mineral sales in 1980, falling to 12,5% in 2014. Coal currently leads the pack, having contributed 27,0% of total mineral sales in 2014.
The analyst warns that depletion rates says gold resources will be exhausted in just 33 years and if the estimates hold true the country will take “on a much reduced role on the global gold mining stage.”