Gold News

Gold investing could be buoyed by SA refusal to self-generate

Deep-level workers at major gold mines in South Africa are resisting calls to generate their own electricity as they attempt to stick steadfastly to mining.

Eskom has been struggling to bring levels back up to normal since the country was plunged into a power crisis in January, but many mines are still relying on them for electricity.

Junior miners such as Australia's Braemore Resources have labelled such South African miners as "spoilt", but senior figures have come out to explain that using Eskom power is still the most cost-effective approach.

Graham Briggs, chief executive officer of Harmony Gold, the world's fifth biggest gold producer, told Mining Weekly: "It makes more business sense, and our main concern is rather to focus on safety in times of power outages."

The stubborn stance means that output could be compromised over the coming weeks and months, a situation which would force gold prices higher.

Furthermore, the over-reliance on Eskom's power supplies would bring disastrous consequences should it suffer another crisis - a fact which should also encourage anyone considering investing in gold.

Mr. Briggs' comments were leant further weight by Terence Goodlace, the outgoing chief operating officer of the world's third largest gold producer Gold Fields, who told the magazine that, "[We are] accelerating what we need to be doing to save energy, rather than cogenerating power".

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