South Africa produces less gold (March 18, 2002)

South Africa’s gold output tumbled in 2001 but is now stabilizing, according to that country’s Chamber of Mines.

Production slipped to 393,254 kg, from 427,981 kg in 2000 — the lowest level since 1953, when 371,395 kg were produced.

“The decline is attributed to an 8% fall in the average grade to 4.13 grams per tonne,” says Roger Baxter, the Chamber’s chief economist.

However, production is expected to stabilize at around 390,000-400,000 kg as two major projects — South Deep and Target — reach full production in 2002. South Deep, a joint venture between Placer Dome and South Africa’s Western Areas, is projected to turn out 700,000 oz. gold per year.

South Africa is now the cheapest large-scale producer of gold in the world. Nonetheless, capital expenditures by miners increased 21.8% ion 2001.

Gold output in the fourth quarter fell to 101,447 kg, compared with 107,989 kg in the corresponding period of 2000.

Cash operating profits increased nearly 53% in rand terms, which resulted in miners paying 65% more tax. Tax paid by the industry totalled R1.2 billion in 2001.