April 21st, 2011
04:38 PM GMT
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The gold price has hit $1,500 for the first time. However, it is unlikely South Africa, once the world’s largest gold producer, will reap the benefits of these prices.

South Africa’s gold mines are some of the deepest in the world and so extracting the precious metal has become more expensive over the years. Mines have closed down and retrenched many workers.

Even though commodity prices for gold, copper, coal and iron ore have been rising steadily, many say the South Africans may have missed opportunities to capitalize on these heady levels. Despite the boom times, the South African mining sector has contracted, admitted the government in parliament recently.

Negative perceptions have scared off potential investors for a number of reasons. Inflexible labor laws make employers think twice before setting up shop in South Africa. Infrastructure, like rail corridors to transport coal, for example, is woefully inefficient. Also, there has been much political noise about the possibility of the mines being nationalized. Government keeps on discrediting the calls but the worries still persist for international investors.

South Africa's leaders also point to the new rail links that are being built, the electricity supplies being upgraded and other benefits to doing business in Africa’s largest and most sophisticated economy.

That said, there is still the sense that South Africa is missing the boat.

Interestingly, many economists and mining experts say it’s other African countries that may benefit, because as commodity prices skyrocket, the appetite for risk increases.

The South Africans recently joined the BRIC club of emerging economies and the Trade and Industry minister says that they expect $17 billion of investment over the next three years because of this new relationship. Doors will be opened, new deals will be done, say the South Africans.

However, will it be too late to ride the wave of these boom times?

soundoff (12 Responses)
  1. Oladipo Akinyemi Omole

    Robyn dear,
    I believe you're enjoying South Africa and bracing-up for the expected $17billion of foreign investment inflow to South Africa.That South African Gold Mines are among the deepest in the world is a big plus for miners generally who would not need to do much to access the gemstones.It's all the more easier for mining companies to operate.
    I don't think indigenization is relevant in South Africa and it wouldn't be a factor.In essence, South Africa is ready to reap bountifully from the appreciation of gold and other precious metals.
    P.S:Robyn,you know I would really appreciate an hello from you.Cheers.

    April 22, 2011 at 2:31 am |
  2. Devon

    Robyn dear,

    As a reporter, you serve a very powerful and important role in the ACCURATE dissemination of information to the world’s public. The influential nature inherent in your role has the potential of swaying the minds of individuals into believing a desired objective.
    Now about South Africa: If anything South Africa is and has been able to sheppard its raw material from its deep mines to hundreds of destination throughout the world. And we do it efficiently and ethically. We've been doing it for years now. Our labour laws are fair and judge to the miners considering their unique work environment. They maybe inflexible to some investors as their agendas are riddled with greed and unscrupulous acquisition of wealth irrespective of the humanitarian injustices. We've seen this in the past. Foreign investors, allies to the then apartheid government bolster their way in, acquire indigenous land (forcefully removing its inhabitants) and syphon the returns to overseas coffers. Unfortunately many of these investors in the past have been Jewish. Hence the nationalising of mines. It makes sense to serve those that are most deserving than those that . Your article does have a bitter taste of disgruntled overseas investors.
    A new world economy is emerging. Embrace it..

    April 22, 2011 at 3:22 pm |
  3. norm dude

    keep it out of the hands of those racist SA'ers....they don't fool anyone

    April 22, 2011 at 9:51 pm |
  4. Gideon Malherbe


    Well written and concise representation – but things are on the boil – see http://www.aga-tic.com/agatic/ one of the world's largest innovation teams assembled to turn the gold mining sector's decline around. They are currently coordinating 70 technology projects to go deeper, safer and at a lower cost. By the way – that's the deepest holes in the world.

    April 22, 2011 at 11:20 pm |
  5. André

    For decades, the US was effectively robbing South Africa of our gold.. by having the "fixed price" of around $32 per ounce, stockpiling Fort Knox.

    Now, the stupid union-inspired anti-employment laws makes it all but crazy to even consider employing someone in South Africa.

    Indigenization? I can PROVE my (South) African ancestry for at least 350 years, much more than what the President can.. but because I am pale, some Nigerian or Zombibwean who just skipped over the border last week has more rights that I do.

    April 22, 2011 at 11:40 pm |
  6. John Gabriel

    Stupid question. The benefactors of the gold rush are those who are in control of the world's wealth. Those who own the wealth in South Africa will benefit. For those without wealth, nothing has changed.

    Nationalizing the mines is the only chance the majority of South Africans might stand to benefit anything.

    April 23, 2011 at 7:01 am |
  7. Colin J. FRYER.

    I live in Cape Town, South Africa and as an African of 34 years experience witness and observe the prowess of the gold mining companies that remain producing the yellow metal. Agreed that there have been a number of closures with resultant job losses but in a market so influenced by price fluctuations, it is to be expected. Nationalisation ? Our ANC Youth League leader believes it is a certainty, the ANC government not. South Africa remains a third world country within the realms of the mining industry reflected by abject povity for the majority of workers and unbridled wealth gifted to the owners/investors. At US $ 1500 per ounce and the US $ an almost worthless piece of paper is the price of gold really at an all time high ?

    April 23, 2011 at 8:36 am |
  8. Jos Jacobs

    John Gabriel you are an absolute idiot. The govenment already has over 50% of the mining income from taxes without lifting a pencil. By nationalizing the mines and banks the government will have to manage and become miners and bankers and we all know how badly govenment management with corruption is. The majority of South Africans will get even less. All foreign investment in Souith Africa will run and withdraw and there will be no investment at all – let alone jobs being created. South Africa will no doubt become a Zimbabwe.

    April 23, 2011 at 11:25 am |
  9. mjs

    South Africnas can stick their gold up theirs...there are much more better opportunities elsewhere.

    April 23, 2011 at 11:35 am |
  10. sabina

    hi andre

    well, i dont know what you are trying to get at but, i am from 'zimboland' and on both sides of my family we can trace our heritage back over 500 years, and guess what, half my heritage , by modern bounderies, is based in south africa, i dont need to skip over the border to get any thing, dont make excuses, after all, the percentage of wealthy 'pale faces' in S.A is far greater than the number of wealthy 'non pale' people.

    April 23, 2011 at 11:50 am |
  11. Oladipo Akinyemi Omole

    Robyn Dear,
    It appears Zimbabwe,Sierra-leone,Liberia and possibly Nigeria and Kashmiere would be casualties of their unpreparedness to reap bountifully from the appreciation of Gold and other precious metals world-wide.Nationalization is certainly out of the question in South Africa and it has always not been an issue.The industry there is well defined and unlike Zimbabwe, Sierra-leone or Liberia where the specter of nationalization exists and even then those considering nationalization would have the market to deal with, don't they?The market is The West.
    Any attempt to nationalize goldmines is doomed and defeatist.It simply wouldn't succeed just like Sabina said.Don't forget this business requires capital and expertise too without which nationalization can't succeed.I remember reading in Sidney Sheldon's Bloodline about Kruggher-Brent which has been mining gold and other precious metals in South Africa for ages.As I said earlier South Africa is all set to reap bountifully.

    It's your friend,

    April 24, 2011 at 1:48 am |
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    September 13, 2012 at 3:31 pm |

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