SA’s gold miners are reaping the effects of a double-dose of good luck
JUST eight months ago, half of SA’s gold mines were bleeding cash as their losses and debts mounted. Now, profit is the highest in a decade, and producers who had been searching for ways to cut back are instead hunting for acquisitions to expand.The about-face reflects a rare double-dose of good fortune for an industry that saw two decades of output declines, violent labour unrest and rising costs to sift out nuggets from some of the world’s deepest and most-dangerous mines. Not only has gold rallied in 2016 — outperforming every major asset — but profit on the sale of bullion for dollars has been turbocharged by a plunge in the value of the rand, which reduces the domestic cost of production.Harmony Gold, which last year had the highest production costs of any major producer, will make about R160,000 on every kilogram ($326 an ounce) it sells in the first quarter, compared with a loss of R14,000 a year earlier, according to company data. Harmony shares, after plunging 28% on the JS...
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