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The last thing investors in SA’s troubled gold mining shares need are protracted, uncertain wage talks, culminating in a strike or a settlement that squeezes narrow profit margins at a time when the rand gold price is subdued. Analysts speaking about the mining sector point to a series of above-inflation wage increases and cripplingly high electricity price increases as the two major factors inhibiting the industry. For SA’s gold mines these two issues are most heavily felt. The mines are labour intensive, requiring large numbers of people in narrow working areas using brute force to drill and extract ore. They are also among the world’s deepest, needing high levels of refrigeration and ventilation, both of which use large amounts of electricity. SA’s mines are, by and large, old, with working areas drifting further and further away from the shafts that lower employees into the earth. Over the years, combined with falling grades of gold, this has meant productivity has fallen. The g...

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