CAPE TOWN (miningweekly.com) – Despite South Africa no longer being a significant producer of gold on a global scale, gold mining remains a key part of the South Africa economy by providing jobs for more than 112 000 people who earn R30-billion a year, Chamber of Mines of South Africa CEO Roger Baxter said on Monday.

Speaking on the first day of the Mining Indaba at a function to mark the 30th anniversary of the World Gold Council (WGC), Baxter said that for every mineworker, another two workers exist in other industries and there is a ten-to-one social multiplier of people who are dependent on each mineworker for their daily subsistence.

He recalled that in 1970, when South Africa was producing 1 000 t of gold a year, it was mining high grades of 13.7 g/t, which was necessary to breakeven with costs at a fixed gold price of only $35/oz.

Currently, South Africa is mining grades of 2 g/t and producing 138 t of gold worth some R68-billion and ultimately all that product is exported from South Africa.

“So, the tentacles of the sector are huge, and gold mining is still a key part of our economy,” he said.

He singled out the Krugerrand gold coin, 60-million of which have been sold globally, as the overwhelming success of the collaborative efforts of the chamber, the Rand Refinery and the WGC, which had its origins in the South African chamber.

Creating demand for gold was one of the key discussion points, with the promotion of gold sales leading initially to the establishment of the International Gold Corporation, or Intergold.

On April 12, 1986, the chamber’s council concluded a circular setting out the terms of reference of the WGC, with agreement reached to transfer Intergold assets to the activities of the new council, registered in Geneva.

The formation of the WGC was largely based on gold production being forecast to continue increasing at a time when South African gold production represented 77% of the world’s newly mined gold at 1 000 t a year.

The rationale of the WGC was to create fixed demand for gold in the global market place.

It is also no coincidence that the global sanctions imposed against South Africa’s apartheid government in 1986 contributed to the decision.