Stuck between a rock and a hard place
Declining ore grades and debt hobble once mighty SA gold firms
For 27 years South Africa had 69 listed gold companies, but today there are a mere six, all of which face declining grades, and, some of them, high debt that leaves them no leeway to consider new investments. Moody's has rated the outlook for most of these gold companies as stable, largely due to the restructuring they have implemented, which has entailed retrenching workers and shutting down some loss-making assets by Sibanye and AngloGold Ashanti. Of the four major gold miners in South Africa, Sibanye-Stillwater, Gold Fields, AngloGold Ashanti and Harmony, Sibanye has the heaviest debt burden. It has been about three years since substantial investments were made in the gold sector. Rather, in light of concerns over the Mining Charter, investments have been offshore - a trend that is expected to continue."They [Sibanye] know that because they have so much debt, they can't afford to make losses anywhere, they need to service that debt otherwise they will get pushed to raise equity o...
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