Sparkle to Return to Struggling South African Gold Mining Industry in 2011, Says Frost & Sullivan

CAPE TOWN, South Africa - The South African gold mining industry, which has been in decline for a number of years, will continue declining up to 2010. The industry will, however, rebound from 2011 as the electricity supply situation and skills availability improves.

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New analysis from Frost & Sullivan, South African Gold Mining Industry, (www.frost.com), finds that the market had an estimated output of 220 metric tones of gold in 2008. Output levels are projected to decline, before recovering in 2014.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Patrick Cairns, Corporate Communications, at patrick.cairns@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brief brochure will be sent to you by e-mail.

“Despite facing a host of challenges, South Africa’s gold mining sector has maintained its position in the global gold mining industry,” notes Frost and Sullivan Research Analyst Wonder Nyanjowa. “South Africa is the world’s third largest gold producer after China and the United States of America.”

The rising price of gold in international markets, state-of-the-art processing and refining plants and the transformation of the South African gold mining industry will continue to be key drivers of growth. The remaining deep-level gold deposits in the Witwatersrand gold basin of South Africa will continue to attract the attention of explorers and investors, given strong metal prices and the technological breakthroughs that are minimising operating costs.

However, the deep-level mining necessary in the country exacerbates safety risks and uses more electricity and diesel for the transportation of personnel and ore bodies to the surface. The net effect is that deep-level mines are more costly and uncompetitive to operate.

“The South African government’s renewed focus on mine safety, declining ore grades, electricity shortages, skills shortages, increased operating cost pressures and a difficult labour environment will result in further production cuts,” cautions Nyanjowa. “Mining companies are likely to be concerned with sustaining current operations rather than opening up new mines.”

South African gold mining companies should focus on improving operating efficiencies, cutting hedge books and containing costs at every level of their operations. Use of the latest technological breakthroughs in South Africa’s deep level mines will help contain costs.

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South African Gold Mining Industry M332 Contact: Patrick Cairns Corporate Communications - Africa P: +27-18-468-2315 E: patrick.cairns@frost.com

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Source: Frost & Sullivan

Patrick Cairns, Corporate Communications - Africa of Frost & Sullivan, +27-18-468-2315, patrick.cairns at frost.com / Logo: https://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO