Gold Mining in South Africa Essay Example for Free

Gold Mining in South Africa Essay The critical issue facing the mining industry according to Zoli Diliza chief executive, chamber of mines is ensuring that the mineral policies of South Africa aligns with the highest standard of administrative justice, promote an internationally accepted level of security of tenure and invariably promote an enabling environment that will attract investors into south Africa, hence, improving her competitiveness. Gold’s rarity, beauty and durability have ensured its use as a medium of exchange as well as astore of value There has been a power crises issue in South Africa which has led to the shut down temporarily of major gold operations. This is a serious problem that in that there is limited capacity to bring the mine workers of the enclosed spaces in the mine due to ventilation breakdown. Continues power outages which have resulted in disrupted operations in the goldmines obviously have a significant impact on world gold supplies mine, this is one of the reasons South Africa is taking the backseat as the world’s largest producer of gold with china taking the front seat. Lawrence William) (2008) It was recorded in 2010 that gold production was down to 200 tons. Despite the substantial increase in the real price of gold in recent years, there has been a continuous decline in gold production , unless substantive new capital investment in new mines is attracted the decline in production is likely to continue. There is also a decline in engineering and manufacturing activities associated directly to the gold mining industry. Inorder words, the consequence of the decline in gold production in south africa has been the loss of major sectors of South Africas previous substantive heavy engineering and manufacturing capacity The gold industry in the early 1990s experienced a tight profit squeeze and voilatility in prices, that period was also seen by rampant inflation. The pressure that generated the profit squeeze was as a result of workers demand related to their salaries as awell as housing, health and safety. Another important cause was due to stagnant prices which reducesd reserves amd discouraged exploration of mines. And as expected, the profitabilitu constraint led to retrenchment of workers as a management mechanism for the mines. The gold industry in SA faced a tight profit squeeze in the early 1990s. The gold price was kept at a constant nominal rand value by the Reserve Bank from 1988 to 1992 despite rampant inflation. The 1987 great mineworkers strike was the highpoint of employment numbers. Profit margins were under severe pressure both from worker demandsrelated to wages as well as housing and health and safetyand from stagnant commodity prices which reduced reserves and discouraged new exploration. In addition to profitability constraints, retrenchments were a weapon of mine management to reduce the effectiveness of the National Union of Mineworkers as it recovered from the strikewhich had seen the dismissal of many union leaders. There was common cause that the industry needed to restructure in order to extend its life. The article put forward proposals from a labour perspective.