The soaring price of gold has added billions of dollars to the value of South Africa's exports this year.
The soaring price of gold has added billions of dollars to the value of South Africa's exports this year. It will also boost the coffers of the government with a healthy increase in mining tax revenue. In the light of the boom, new methods of extraction have been devised to recover more gold from old mine dumps.
SYNOPSIS: When this mine dump -- about sixteen miles (25 kilometres) from Johannesburg -- was formed in the 1920's, it was assumed that all of the recoverable gold was out.
But today, high pressure water cannons reduce the dump to a mud-like state so that billions of dollars of once-abandoned gold can be extracted.
From several dumps around this plant, the Anglo-American Corporation will reclaim five and a half tons of gold this year, to add to the two hundred and fifty-five tons of gold from conventional underground mining.
All of this enhances South Africa's position as the world's largest producer of gold. Over seven hundred tons -- more than half the new gold on international markets last year -- came from South Africa.
At four hundred dollars an ounce, one of these ingots is worth one hundred and sixty thousand U.S. dollars. Each tray is worth five point eight million dollars.
Despite competition from Canada and the United States, South Africa is issuing record numbers of gold Krugerrands. It means more gold, in coin form, than the total tonnage mined in Canada in an entire year. Thirty thousand one-ounce Krugerrands are minted every day -- each one worth more than four hundred dollars -- with the day's production running to twelve million dollars.
Gold has been the backbone of the South African Stock Exchange this year. According to the British Investor's Chronicle, the Johannesburg Exchange has been the most profitable market in the world, over the past ten months.
The boom has enabled South Africa to offset the big oil price hikes this year. The national debt is being substantially reduced, and there are hints that the tax payer will enjoy a tax cut in the next budget. But for the moment, the government is proceeding cautiously, remembering the earlier boom this decade when gold fell suddenly from two hundred dollars an ounce to about half that. This time, they say, windfall profits will not be spent in advance.