At this time of near-record gold prices, it’s worth asking whether JSE-listed miners of the metal have ever had it so good. Three companies are now earning a $650-$700/oz margin over their all-in unit costs: Gold Fields, Harmony Gold and AngloGold Ashanti. These are good times indeed for a sector largely seen as in decline in South Africa. But while it’s undeniably impressive, it turns out that these companies have twice earned more, according to a report last month by RMB Morgan Stanley.

In 2011 and 2020 all three firms registered margins of between $800 and $1,000/oz above their unit costs. However, the bank also discovered that in those years, at a certain point, costs began to keep pace with the gold price. The implication is that today’s margin may be capped. Perhaps this explains, at least partially, why the one-month performance for Gold Fields, AngloGold and Harmony is down 5.6%, 5.4% and 4.5% respectively...

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