Almost half of the 187,200 tons of gold ever mined in the history of human civilization has come from gold mines in Africa, and most of that from South Africa. In the past 130 years, South Africa’s gold industry has weathered wars, prolonged and violent strikes, tragic accidents, resource nationalism (including super-taxes), commodity cycles and technical challenges. It isn’t going to go away in the near future.
The start of gold mining in South Africa dates well before the well-known extraction of the layered Witwatersrand gold reef around Johannesburg from 1886. Exploitation of the greenstone belt around Barberton, which is still being mined by Pan African Resources today, began about 12 years earlier, in 1874. The earliest accounts of gold mining in southern Africa date back to Arab writers of the 12th century.
But there’s still a lot of gold left in South Africa. By 2022, remaining total world reserves of gold were 52,000 tons – and those are just the reserves that have been mapped out with some certainty. Known reserves of gold in Africa currently total 6,800 tons, of which there are 5,000 tons of gold in South Africa. To put that into context, two of the most-explored countries, the US and Australia, have 3,000 tons and 8,400 tons of gold reserves respectively.
Managing older mines
It is impossible to estimate how much more gold remains in the world that has not been found or properly mapped. Some of it may be too deep to mine using current technology, or sits in countries with little infrastructure, making exploration difficult. Currently, some South African gold mines extend as deep as four kilometres, but at such depths mining requires a high gold price because of natural rock temperatures of up to 50⁰C (122⁰F) and vertical rock pressures of up to 100MPa.
The technical difficulties of deep-level gold mining in Africa have never deterred entrepreneurs. In a 1988 article in the SAIMM Journal, the author, CE Fivaz, describes how, by 1890, when unoxidised ores were first discovered on the Witwatersrand and recoveries dropped alarmingly, “gold shares were sold on an unprecedented scale, and doom and despondency seized the town of Johannesburg”. Then the MacArthur-Forrest cyanidisation process was deployed to treat the ores, and the longer-term future of the South African gold mining industry was assured.
Despite the age of the Barberton Mines complex, which has produced about 11 million ounces (344 tons) of gold over the past century, Pan African continues to mine it profitably. Proof of the mine’s remaining potential is that Barberton’s mining licence was renewed in 2021 for another 30 years.
Barberton is the eighth-largest mine in South Africa, with 1.66 million ounces (52 tons) of proven reserves. However, its age, and the nature of greenstone deposits, pose challenges at times. Some of these were evident in the first half of Pan African’s 2023 financial year, when there was a 20% year-on-year decline in production from the three underground mines at Barberton (Fairview, Consort and Sheba).
The issues management is having to tackle at Barberton are typical for old mines: it takes longer for miners to reach the stopes as they extend further from the access shaft, and the grades are declining. But Pan African has faced these issues before. It has changed the shift system to increase productivity, and is improving infrastructure and undertaking more exploration at Fairview. At the same time, even as production has temporarily fallen, the rand gold price has improved, helping cash generation. South African gold miners sell gold in dollars, so revenue benefits as the gold price rises or the rand/dollar rate depreciates, but their operating costs in rands don’t change at the same rate.