South Africa’s gold companies, already mining at the world’s deepest depths, are looking to plumb even deeper veins in a new gold rush spurred by record prices.
The deeper miners go, the richer the ore being uncovered. The price in dangers, though, includes rockfalls, poisonous gas explosions, flooding and earthquakes.
Some foreign companies have been deterred by the risks here. But Gold Fields, the country’s second-biggest producer after AngloGold Ashanti, is ready to set a new record, digging more than 4 120m at its Driefontein mine.
A worker was killed there earlier this month by a tremor at 3 000m.
Harmony, the world’s fifth largest producer, wants to develop a new mine below an existing one at Elandsrand, at a depth of 3 566m, which it says would extend the life of the mine by 18 years.
About 3 200 miners working to deepen the mine shaft there were trapped this month more than 1,5km underground.
They were rescued after some spent nearly three days underground. No one was injured in that incident, which was linked not to the push to go deeper, but to a pipe of pressurised air exploding and crashing into a shaft, cutting off electricity to the main elevator.
At a neighbouring mine, two people were killed in an accident a week earlier. And 23 wildcat workers mining illegally died in a fire at a disused part of a Harmony mine this week.
Four workers died on Wednesday in underground accidents at two mines owned by Gold Fields.
”It’s a deep, dark and dangerous business,” said Martin Creamer, editor of the local Mining Weekly magazine.
Miners do not need new technology to go deeper, but will have to use good refrigeration to cool temperatures in excess of 43,3C.
Chilled water or ice and water are pumped into reservoirs. In some cases, miners wear jackets padded with ice. Still, working conditions are sweaty. Meanwhile, water has to be constantly pumped out of the mine floor.
To get to the treasure chest, belts and braces also are important, Creamer said.
High gold prices have spurred miners to work ever deeper in marginal mines. In 2005, nine mines employing 69 000 workers were considered marginal or loss-making. Today, mining deeper, they’re in profit.
While many miners say it’s possible to go deeper and to do so safely, the country’s Chamber of Mines has been disturbed enough to set up a safety committee to consider the dangers. Despite the new bonanza, South Africa’s gold production continues to fall as resources have been depleted. The United States is threatening to win its top position in the world, with Australia and China lagging far behind.
According to the chamber , South Africa’s production has fallen from a high of 1 000 tonnes in 1970 to 275 tonnes last year. Exports fell from 50% of the country’s total in the 1980s to 8,2% of exports in 2006.
That year, South Africa exported R36-billion of gold and sold R720-million locally, according to Alex Conradie, an economist at the Department of Minerals and Energy Affairs.
Figures are about the same for this year, with R6,7-billion announced for new projects at old mines and in new mines, he said.
Of that amount, only R300 million is foreign investment.
Creamer said foreign companies fear the risks of South Africa’s deep, deep mines.
The biggest foreign investment came in 2005 when Vancouver, Canada-based Placer Dome bought South Deep Mine -Ã¢â‚¬’ considered the crown jewel of South Africa’s gold reserves — only to pull out a year later when a runaway skip went down a new shaft, extensively damaging the shaft. There were no injuries.
South Africa has been the golden mecca of the world since 1886, when the vast Witwatersrand gold reef was discovered in what now is the economic capital, Johannesburg. First, nuggets were easily recovered by hand. Today, South Africa leads the way in deep-mining technology. At its height, South Africa’s gold industry produced about 80% of the world’s supply in 1970.
While gold prices recently have climbed to highs approaching $500 an ounce, and the highest prices ever in South African rand, the percentage increase still is far below that for uranium, copper and platinum.
Gold mining remains a vital part of the South African economy. It’s a major tax payer and one of the biggest private sector employers in a country with 25% unemployment. But the number of miners has dropped drastically even as earnings increased, from 342 439 in 1996 — when 100 000 miners were laid off as gold prices slumped — to 137 611 in 2005.
When prices were low, miners were laid off and marginal mines have also cut costs, including on workers. The cuts have yet to be reversed, even though prices are rising. The drop in worker numbers fuel accusations that the mining industry is cutting costs to make ever greater profits to the detriment of health and safety — a charge the industry denies.
Cost of a tonne of gold
Of 119 people reported killed in South African mines last year, 113 died in gold mines. By comparison, the United States suffered five fatalities in all its metal mines in 2004, according to the US National Institute for Occupational Safety and Health. A South African commission in 1994 said each tonne of gold produced in South Africa cost one life and 12 serious injuries. South Africa produces about 600 tonnes of gold a year.
Its poorly paid miners are the worst off in the industrial sector, according to May Hermanus, director of the Centre for Sustainability in Mining at the University of the Witwatersrand and a former government chief inspector of mines.
”Miners underground doing a terribly dangerous job still earn less than industrial workers in general and that’s the inverse for other countries where miners are paid much better than in other industries.”
She said this was a legacy of South Africa’s racist past. Most miners are black, even though black entrepreneurs are increasingly entering the board rooms of mining companies.
In August, a mineworkers’ strike won wage increases of 7,5% to 10%. The average miner makes R2 500 to R3 500 a month.
Hermanus said economics should not be the only issue.
Deep mining, she said, requires ”very, very special oversight and supervision and methodology” that often is absent.
”Mining at deep levels, besides the big risks that are not completely understood, I think raises a morale and ethical dilemma as to the position of miners exposed to seismic risks that are not predictable.” Ã¢â‚¬’ Sapa-AP