S. African Gold Mining Production Drops by 31%

This news could be great or it could be disturbing depending on your view point. If you own stocks in South African mines this would be horrific news, but if you hold a few ounces of the shiny in your vault, or somewhere else within arms length, this is awesome news.

We are on record, since mid 2017, stating in 2019 the gold market would begin moving to higher ground. We have been stated gold will continue climbing higher through 2023 and as it climbs higher it will be difficult to impossible to return to the low exchange rates we see today. If you haven’t made a move or would like to add to your stack, the first half of 2019 – which is ending quickly – may be a time for you to do your own research and see it how looks for your situation. We are considering adding physical gold to our assets as we see what is happening as a harbinger of things to come. We have never seen gold as an investment but as money and insurance.

The mining production collapse in South Africa, in our opinion, will getting to worsen. The new so-called leadership in South African nation knows nothing about what they are doing or how to run a country. This is a very bad combination for the mining industry. South Africa was the top producer of gold until China upped their production approximately 5 years ago. With this new information will they move into 3rd position in global gold mining production?

Production of gold by South African mines retreated the most in six years in December as a strike at the nation’s top producer of the metal continued.

Gold output declined 31 percent from a year earlier, compared with a revised 14 percent drop in November, Pretoria-based Statistics South Africa said in a statement on its website Thursday.

Key Insights:

• This represents a 15th straight month of declines in production. South Africa used to be the world’s top producer of the metal but deeper ore bodies, labor strife, high costs and policy uncertainty have crimped output.

• Sibanye Gold Ltd. said earlier this week that it was considering shutting unprofitable shafts and cutting jobs at its operations for the metal amid a three-month-old wage strike that’s curbing output. The company plans to cut more than 6,000 jobs, it said today.

• Total mining output declined 4.8 percent from a year earlier, the statistics agency said.

• Production of platinum-group metals increased 6.1 percent from a year earlier, it said. This is a fourth straight month of gains, the longest such streak since 2016. Source

What will be interesting is to see where we are one year from now. How will 2019 play out and will production recover, fall further or continue bottom bouncing? Our prediction is it will continue bottom bouncing and we will see at least one more “mega merger” within the gold mining industry to compliment the two that have already happened.