Gold miners facing tough challenges
A new report from the world's largest gold producer Barrick Gold provides yet another illustration of the problems facing gold mining companies.
In South Africa, extraction of gold from depths of more than 6,000 metres has almost become the rule rather than the exception. Mining costs are being pushed up by the logistical challenges of drilling at great depths, as well as an increasingly militant work force which is demanding higher wages. Add exploration costs to this mix and it’s little wonder that companies’ profits are being squeezed, despite the high gold price. According to Barrick, total production costs for all mining companies exceeded the $8 billion mark last year.
While 1991 saw the discovery of 11 new gold mines, in 2011 only three mines with production potential were found.