Nairobi — For South African gold miners, it’s both the best and worst of times. The metal started the year with a bang, rising 4% so far and trading near the highest since August 2016. But an equally impressive rally in the rand means that SA-focused producers are likely to miss out on the party. Because mining companies pay most of their expenses in local currency, a stronger rand squeezes profit margins and can render some operations unprofitable. Many of SA’s gold mines date back to the 1950s and 1960s, and much of the easily accessible metal has been exhausted, while labour-intensive mining methods compound the effect of currency moves. "With the rand below R12/%, margin pressure is definitely building up," said Carsten Menke, an analyst at Bank Julius Baer. "Rand strength is the flip side of an improving economy, but it’s causing headwinds to miners because of costs going up — they are not enjoying the tailwinds from rising gold prices." The rand traded below R12/$ on Wednesday...
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