Despite generous mineral reserves and high-grade orebodies, South Africa’s gold mining industry continues to see the sparkle it once had as the biggest gold producer in the world dimming, having seen steadily declining production figures in recent years, positioning it in sixth place in 2015, where it is likely to remain.

“Our sources suggest 2016 production in South Africa of 167.1 t, which is virtually the same as the 167.2 t produced in 2015, ” notes World Gold Council (WGC) market relations director John Mulligan.

He tells Mining Weekly that, while final figures have yet to be confirmed, current estimates suggest that South Africa produced between 270 t and 300 t less than top-ranked China.

Mulligan highlights that there are geological, economic and political factors constraining production levels in the local gold mining industry. To sustain production levels and compete with the top producers globally, he suggests that “the industry and its partners . . . maintain lower and stable costs, ensure a fair and consistent policy and regulatory framework, and rebuild investor confidence in the sector’s ability to offer enduring opportunities and returns that outweigh the risks”.

Importantly, he notes that the local industry needs to modernise the technology and infrastructure used at its ageing mines, which are becoming increasingly deeper, making it more difficult to reach and mine.

“But, if the various stakeholders – government, mining companies, the workforce and communities – can agree on the significant value that gold mining can add to the local economy and work in a more coherent and collaborative way to realise that value, then this might put the industry on a far better global footing,” explains Mulligan.

The immediate outlook for the gold industry, globally, is positive, as it “is in a more healthy and buoyant state than it has been for a while”, and some local producers may see marginal production increases, owing in part to a weaker rand bolstering revenues.

However, Mulligan concludes: “It is unlikely to have an immediate or substantial impact on overall production levels, given the very substantial challenges and demanding nature of South African mining, physically and sociopolitically.”