Ghana Surpasses South Africa and Becomes the Most Promising Country for Gold Mining in Africa

South Africa, once the world’s largest gold producer, is facing the depletion of reserves, aging infrastructure, and going to the end with irreversible fatigue.

Since 2007, South Africa has fallen from the throne of the first gold producing country to the current eighth with a nearly gradual decline in production and a one-third drop in the number of employees. At the same time, the double wages of mine workers has further damaged the profitability of the gold mining industry.

According to the Minerals Council South Africa’s data, 75% of South Africa’s gold mines is no longer profitable since 2017.

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The Wall Street Journal said that because the current global gold price was still about 40% lower than that in 2011, the market value of South Africa’s three major gold miners evaporated about $ 543 million last year. Compared with the global average, the cost of gold mining in South Africa is rising and the number of casualties is also increasing.

“Gold is a sunset industry. No matter what you do, you can not change that.” Sipho Pityana, chairman of AngloGold South Africa’s largest mining company, told Bloomberg.

The former glory of the South African gold mine


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South Africa was once the world’s largest gold producer. In 1970, South Africa’s gold production even accounted for 75% of the world’s total reserves.

This iconic industry has not only created huge wealth but also attracted immigrants from all over the world. During this period, the infrastructure industries such as railways and highways have sprung up, making South Africa quickly become the most economically developed country on the African continent.

According to Reuters, in 1980, the mining industry accounted for 21% of South Africa’s GDP, making it the largest contributor to the manufacturing industry at the time.

But today, the mining industry now only accounts for7% of the economy, and the number of people employed in the industry has dropped by 40%.

Exhausted reserves, poor infrastructure, and increasing accident costs led to a 16% year-on-year decline in production in May. More notably, South African gold production has fallen for eight consecutive months.


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Bernard Swanepoel, the former CEO of Harmony Gold Mining Co. told Bloomberg that gold mining in South Africa was likely to be extinct in the middle of the century. “I really think this is the last chapter of South Africa, but the last chapter is also a very good chapter. After all, South Africa has experienced a glorious golden year for 30 years golden era.”

After the gold decline in South Africa, it has lost the throne of Africa’s largest gold producer and is replaced by Ghana. 

High production costs, the frequent strikes and the geological challenges of exploiting the world’s deepest gold mines are reducing South Africa’s gold production.

At the same time, Ghana is benefiting from low-cost mines, more friendly mining policies and new development projects. South African gold giants AngloGold Ashanti Ltd. and Gold Fields Ltd. are also now shifting their focus to other countries such as Ghana because of the cheaper mineral deposits and fewer difficulties in mining.


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According to data from the Ghana Mines Association, gold production in Ghana jumped 12% in 2018, although Ghana also had some of the world’s largest gold miners including New Zealand.

Newmont CEO Gary Goldberg said in an interview: “The assets in Ghana are an important part of our portfolio. From a geological point of view, we believe that the potential for continued expansion of mine resources is very large, and we are very happy to conduct business in Ghana.”

Later this year, if AngloGold Ashanti’s Obuasi mine is restarted, Ghana’s gold production will rise to the next level. Obuasi’s gold production is expected to be 350,000-450,000 ounces per year during the first 10 years of operation.

Gold Fields, a gold mining company that has been operating in Ghana for 26 years, said the Ghana authorities, and they understand how to create a good business environment. In 2016, Ghana cut the corporate tax rate and set the company’s royalty fee from a fixed level of 5% to a float based on gold prices in 2017.

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