• 1 hour Nigeria Makes First Step Away From Oil
  • 13 hours Russia Approves Profit-Based Oil Tax For 2019
  • 17 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 19 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 21 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 23 hours Aramco In Talks With Chinese Petrochemical Producers
  • 24 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 1 day Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 2 days Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 4 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 7 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 8 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount

Breaking News:

Nigeria Makes First Step Away From Oil

Alt Text

This Key Gold Producer Sees Its Production Slump

Africa’s second gold producer Ghana…

Alt Text

Did These Mining Giants Just Confirm The Next Gold Frontier?

After Ecuador’s President removed a…

Alt Text

Can Mali Maintain Its Gold Mining Status?

Mali could be about to…

Expect Mine Closures In This Key Gold Mining Nation

Mining

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:




Back to homepage


Leave a comment

Leave a comment




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