Miners’ mixed blessing
A flat dollar gold price is pushing more deep underground mines into the red and increasing reluctance to invest in SA
Gold miners have mixed feelings about the presidency of Cyril Ramaphosa. It could usher in a more investor-friendly mining regime, but at the same time, hopes that SA will be better managed have caused the rand to strengthen. As long as the dollar gold price remains flat, the strong rand and inflationary pressures are squeezing miners’ revenue and profits. This puts some mines at risk of closure and increases the attractions of shallower prospects outside SA or low-cost tailings treatment in SA. Pan African Resources’ two highest-cost mines, Evander Underground and Consort, are being reviewed. CEO Cobus Loots says management is talking to labour unions and nothing is ruled out. In the six months to December, Evander Underground’s all-in sustaining cost (AISC) was R673,444/kg and Consort’s was R761,562/kg, against an average received gold price of R551,506/kg. In the same period last year, the average gold price was R565,298/kg. Pan African as a whole is still profitable, though less...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.