Africa is a major producer of gold, producing up to 30% of global production. Although economic growth and development in South Africa still is the global leader in gold production, it also has the highest average production costs in the world. Coupled with labour problems, lowering grades as well as several mines reaching the end of their lives, it is not anticipated that South African production will increase in the future.
Although Zimbabwe has historically been a prominent gold producer in Africa, political and economic issues could cause production problems for local producers. Tanzania and Mali are rapidly becoming Africa’s newest gold producers with several mines being commissioned or in final feasibility stages. Ghana is still a major gold producer in Africa. Other countries contribute steadily to Africa’s gold output.
Gold mine production is centred on underground and open pit operations in Archaean age greenstone belts in Ghana, Tanzania, Burkina Faso, Cote de Ivoire and Zimbabwe. Nearly all of South Africa’s production is centred on the Witwatersrand placer gold deposits, which are mined almost exclusively underground. Exploration efforts centred on West Africa as well as East Africa are concentrating on surficial weathered gold-bearing lateritic and saprolitic rock, which is very suitable for relatively low cost surface mining methods, including heap-leach gold extraction.
Much of the recent and ongoing success in tapping these areas’ mineable gold reserves is simply due to the fact that low-grade (to 1.3 grams / tonne gold) near-surface (oxidised) ores can be recovered economically. A new challenge will be to economically recover low-grade sulphide ore by open pit and/or underground methods.
South Africa holds 35% of global gold resources and exports 99% of gold output. Gold is the most important mining sector, contributing 27.4% in mineral revenues and employing 56% of the mine labour force.
South Africa’s gold production has been declining steadily, with an annual decrease of around 4% since 1990, and in 1999 production was 425 tonnes (18% of global production), down from 1998’s 473 tonnes. Grades remained basically the same at around 5.09 grams / tonne. Although production has been dropping fast, the industry has undergone some major changes to improve productivity and reduce costs. Evidence of this is shown by the dramatic decrease in working costs from a weighted average cost of over $US 300 / oz down to $US 246 / oz. The cost of production in the USA is $US 189 / oz and in Canada $US 169 / oz.
The last few years have seen some major restructuring of South Africa’s major gold producers with AngloGold, recently listed on the LSE and NYSE, and Gold Fields having become the countries major producers. Other major producers in South Africa are Harmony, Durban Roodepoort Deep and Avgold.
Ghana is Africa’s second largest gold producer, producing just over 78 tonnes in 1999, up from 54 tonnes the previous year, with the value of gold exports reaching $687.8 million.
Mining Companies active
Several of the world’s largest mining corporations are active in African gold mining and development.
Barrick, one of the largest gold producing companies in the world, producing around 3.7million ounces annually, is active in the commissioning of the Bulyanhulu mine in Tanzania, which is earmarked for production in early 2001. Initial production is estimated at 300 000 ounces / year, but should increase to full production at about 500 000 ounces / year. This project alone will contribute 10% extra gold to Barrick’s annual production.
Anglogold (7.1 million ounces in 1999) is active in South Africa, Namibia, Tanzania, Mali and Zimbabwe. Anglogold’s presence in Mali has increased with the go ahead to develop the Yatela deposit, Anglogold’s second gold mine in the country, after Sadiola. Anglo American’s international presence has been strengthened by the acquisition of Minorco. There are a total of fourteen mining operations in total, with a majority in South Africa.
Gold Fields (3.1 million ounces in 1999) is active in South Africa and Ghana with its new open pit operation, Tarkwa.
Placer Dome’s purchase of 50% of the South Deep project in South Africa, rated as one of the world’s largest undeveloped gold mines with 52 million ounces reserves, is being completed. Commercial production of the mine is expected in 2002. Placer produced 3.2 million ounces in 1998 at an average cost of a low $US 149 / ounce.
Harmony Gold Mining Company produced 2.1 M oz gold in 1999 but this is set to increase to more than 2.3 Moz per year after the acquisition of Randfontein Estates Gold Mines in South Africa. Harmony has holdings in four producing mining operations, primarily in South Africa, with a single producer in Canada, and operates a refinery in South Africa.
Avgold (730 000 oz) is primarily a South African producer with some of its operations producing from outside of the traditional Witwatersrand basin in the Barberton greenstone belt. Avgold’s Target project in the Free State is well under development and should begin full production in 2000.
Ashanti (1.5 million ounces) is one of Africa’s leading gold mining and exploration companies. It has four operational mines in Ghana, a mine in Zimbabwe and Guinea. In 1999 Ashanti experienced a serious cash-flow and liquidity crisis due to its extensive hedging policies.
Ranger Minerals’ Damang Mine in Ghana produced 270 000 oz in their 1999 financial year at costs of $US 200 / ounce. Resolute (280 000 ounces) has two producing gold mines, one in Ghana (100% owned) and one in Tanzania (90% Resolute and 10% Government of Ghana).
LonMin has a 32% interest in Ashanti, therefore enjoying 500 000 ounces / annum. LonMin has 100% controlling share of its operations in Zimbabwe. Delta Gold’s (380 000 oz) 100% owned operation in Zimbabwe began production at end 1999 with a mine life of around five years.
Through its two gold operations and dump retreatment operations, Rio Tinto Zimbabwe produces 10% of Zimbabwe’s annual gold production. From its gold operations globally, Rio Tinto produces 1.5 million ounces gold annually. Casmyn Mining has a single open pit project in Zimbabwe as well as other exploration interests in Zambia and elsewhere in Zimbabwe.
First Quantum Minerals’ single gold mine in Zimbabwe produces around 11 000 oz gold per year at an average cash cost of $254/oz. Trillion has two gold mining operations in Zimbabwe, one of which is the Jena Mine, a joint venture with the Zimbabwe Mining Development Corporation (ZMDC).
Randgold Resources, listed on the LSE, operates the Syama and Morila Mines in Mali as well as the promising Loula prospect. Syama’s annual production is around 270 000 ounces gold per annum. Nelson Gold has acquired 70% of the Kalana project in Mali from Ashanti.
Kenor’s single operating mine in Guinea began production at end 1999 with an estimated production of around 65 000 oz per annum at a cash cost of around $US 215 / ounce. The Ity mine in Cote de Ivoire is 51% owned by Normandy.
Gallery Gold has some small gold operations in the eastern part of Botswana, as well as several exploration properties in eastern and southern Botswana.
Sahelian Goldfields owns Burkina Faso’s only producing mine, the Poura Mine, which has resumed production, contributing to a total of 2.3 tonnes in 1997. Although exploration efforts are intensifying, artesinal miners produce a large amount of gold. Gold is second to cotton in earning Burkina Faso foreign exchange.