• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Middle East on brink: Oil tankers attacked off Oman
  • 8 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 57 mins The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 9 hours Confirmed: UN Expert Urges Probe Of Saudi Prince Over Khashoggi Killing
  • 6 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 7 hours OPEC, GEO-POLITICS & OIL SUPPLY & PRICES
  • 1 hour Pioneer CEO Said U.S. Oil Production would be up to 15 mm bbls/day NOW if we had the pipelines. Permian pipelines STARTING Q3
  • 1 hour Emissions Need To Be Halved To Avoid 3C Warming
  • 7 hours The Plastics Problem
  • 4 hours Coal Boom in Asia is Real and a Long Trend
  • 28 mins The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 6 mins US to become net oil exporter in November: EIA
  • 29 mins Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 5 hours Trudeau approves Trans Mountain Pipeline
  • 9 hours Hydrogen FTW... Some Day
  • 8 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
Alt Text

Tanzania Wages War Against Gold Miners

Tanzania’s national government is stepping…

Alt Text

Did These Mining Giants Just Confirm The Next Gold Frontier?

After Ecuador’s President removed a…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Expect Mine Closures In This Key Gold Mining Nation

I wrote yesterday about the collapse of mining in key African gold nation Tanzania. And today, emerging news shows another major gold producer entering crisis.

South Africa.

The dire warning on South Africa’s gold sector came from ratings agency Moody’s. With that group releasing a report saying that mine closures are likely close at hand.

Moody’s noted that recent moves by South Africa to amend its mining code have created great uncertainty in the country. With requirements like increased Black Empowerment ownership and higher royalties weighing on the minerals sector.

With these stricter financial conditions looming, Moody’s said it sees few mining companies investing significant capital in South Africa. As the agency put it, “Without a framework that provides policy predictability and certainty, Moody’s expects mining companies to keep a tight rein on capital expenditure.”

And as Moody’s sees it, that could be a death knell for the industry.

The report went on to note that without expansion capital, many of South Africa’s mines are unlikely to be viable. With the authors saying that many operations have been kept on life-support recently by a weak rand — which is now strengthening, putting increasing pressure on operations.

Moody’s believes that all leads to an inevitable end game: “If the substantial expansionary investment required to reconfigure loss-making mining operations and make them profitable is not forthcoming, mines will either be restructured or closed.”

Related: Can Putin Bring Peace To The Korean Peninsula?

This is the first full-out warning of imminent mine closures. And follows closely on public comments from South African Chamber of Mines CEO Roger Baxter noting that the mining sector is in “crisis”, with recent government policies having “frozen new investment”.

If closures are indeed close at hand, things could get very supportive for gold prices — with South Africa still being the world’s 7th largest producer of the yellow metal. Watch for announcements on specific mine shutdowns here to see if this trend will indeed catch a spark.

Here’s to the point of no return.

By Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News