RENOWNED actor Idris Elba in a documentary about the gold industry, which was released by the World Gold Council last week, showcased the robust transition to renewable energy, and rapid transformation to include more women in mining jobs in the gold sector in South Africa, but the stark reality is that the industry is struggling to stay afloat.
The documentary is now available on YouTube.
This as the industry battles job losses, the migration of companies from the JSE and the dire effects of inflation on bottom lines.
South Africa is among the top gold producers on the continent, while the JSE hosts the biggest bullion stocks. However, of late, companies have been migrating corporate offices and listings from the JSE, with AngloGold Ashanti moving its primary listing to New York this year.
In his latest documentary, Elba journeys to South Africa to explore the significant role of gold across the economy.
The movie, Gold Journey with Idris Elba, explores the first South African gold mines and takes viewers across apartheid bullion mining, showcasing how black miners used the economic power of gold to their benefit to negotiate for greater rights.
It then fast-forwards to present-day gold mining in South Africa where Elba visited South Deep, one of the deepest mines in the world, which has built a large-scale solar plant and touts its automated mining systems.
In the movie, Elba compares gold mining in South Africa today “like gaming” as he watches miners in action and discusses how the shift to automation has opened up mining to more women and has created new higher value jobs.
Through the movie, the World Gold Council has sought to paint a rosy picture of gold mining, propagating responsible mining, transition to renewable energy, the trading of gold from legitimate sources and due concern for environmental hazards as well as factoring in practices that reduce climate change-related impacts.
Industry is subdued
A new report by PwC, SA Mine 2023, said on Thursday that the South African economy has “to a large extent been dependent on” the mining sector. It added that for the first half of 2023, mining export revenue, at R575 billion, accounted for 58% of total exports.
“The long-term outlook on production volumes (of gold in South Africa) remains subdued due to lower grades, higher complexity in extraction and increased costs,” said the report by PwC.
The South African gold mining industry is clearly in peril. The industry has suffered the worst consequences of load shedding, meaning that South Africa could only account for 4% of global bullion output at 110 tons in 2022, down from 132 tons in 2018.
Roger Baxter, the former president of the Minerals Council of South Africa, said earlier this year that Eskom power supply and Transnet’s disjointed freight capacity and systems had been impactful for the mining industry.
Over the past year, South Africa has been replaced by Ghana – which was the major focus of the film by Elba – as the top gold producer in Africa.
Harmony Gold, which operates deeper gold mines in South Africa, is among only a few bullion producers that have operated really profitably, swinging back a profit of $275 million (R5.3 billion) in the year to June 2023 compared to a loss of $48m last year.
The majority of the South African gold mines are capital-intensive, prone to load shedding and suffer from mine inflation costs. Gold Fields has reported a 16% drop in profits for the 2023 interim period.
Sibanye-Stillwater, another top South African bullion producer, said last month it could be forced to retrench as many as 3 000 employees at its Kloof 4 Shaft, with market analyst Martin Rogers saying Sibanye “has struggled to fix the productivity issues” at the operation.
Analysts at PwC say “the positive outlook for a further uptick in gold prices should continue to benefit JSE-listed gold miners” in the long term.
However, Reuters reported on Friday that bullion prices hovered near seven-month lows as investors stayed back from big bets ahead of the US payrolls data release.
Over the weekend, the South Africa gold price was weaker by R16 at R35 336.63 per ounce.
While the World Gold Council has sought to paint a rosy picture of the global bullion production industry, allegations of cheap and child labour, conflicts – often translating to deadly disputes – and a multi-billion smuggling industry have tainted its lustre.
The Gold Mafia documentary by Al Jazeera recently documented shady gold deals involving South Africa in cleansing proceeds from the sale of gold irregularly shipped from Zimbabwe.
“The World Gold Council represents the miners. But it’s a pity. Partly because this is mostly the kind of corporate-marketing video that anyone who has attended a big company event knows all too well. Partly because Elba is far less interesting when reading out a script as a voice-over,” wrote American journalist Brett Arends in an opinion piece on Friday.
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