S. Africa gold miners plunge ever deeper, despite risks

Michelle Faul

JOHANNESBURG, South Africa — South Africa’s gold companies, already mining at the world’s deepest depths, are looking to plumb even deeper veins in a new gold rush spurred by soaring prices.

The deeper miners go, the richer the ore being uncovered. The price in dangers, though, includes rockfalls, poisonous gas explosions, flooding and earthquakes. That has stirred up concerns about the safety of miners, who experts say have the worst lot among South Africa’s industrial workers.

Some foreign companies have been deterred by the risks here. But Gold Fields, the country’s second-biggest producer after AngloGold Ashanti, is ready to set a new record, digging more than 2.5 miles at its Driefontein mine.

A worker was killed there earlier this month by a tremor at just under 2 miles. To compare, the deepest mine elsewhere in the world is in Ontario, at 1.5 miles.

Harmony Gold Mining Co. Ltd., the world’s fifth largest producer, wants to develop a new mine below an existing one at Elandsrand, at a depth of about two miles, which it says would extend the life of the mine by 18 years.

Some 3,200 miners working to deepen the mine shaft there were trapped this month more than a mile underground. They were rescued after some spent nearly three days underground. No one was injured in that incident, which was linked not to the push to go deeper, but to a pipe of pressurized air exploding and crashing into a shaft, cutting off electricity to the main elevator.

At a neighboring mine, two people were killed in an accident a week earlier. And 25 wildcat workers mining illegally died in a fire at an unused part of a Harmony mine last week.

Four workers died last Wednesday in underground accidents at two mines owned by Gold Fields Ltd.

“It’s a deep, dark and dangerous business,” said Martin Creamer, editor of the local Mining Weekly magazine.

Miners do not need new technology to go deeper, but will have to use good refrigeration to cool temperatures in excess of 110 degrees Fahrenheit.

Chilled water or ice and water are pumped into reservoirs. In some cases, miners wear jackets padded with ice. Still, working conditions are sweaty. All the time, water has to be pumped out of the mine floor.

To get to the treasure chest, belts and braces also are important, Creamer said.

High gold prices have spurred miners to work ever deeper in marginal mines. In 2005, nine mines employing 69,000 workers were considered marginal or loss-making. Today, mining deeper, they’re in profit.

While many miners say it’s possible to go deeper and to do so safely, the country’s Chamber of Mines has been disturbed enough to set up a safety committee to consider the dangers.

Despite the new bonanza, South Africa’s gold production continues to fall as resources have been depleted. The United States is threatening to win its top position in the world, with Australia and China lagging far behind.

According to the Chamber of Mines, South Africa’s production has fallen from a high of 1,000 tons in 1970 to 275 tons last year. Exports fell from 50 percent of the country’s total in the 1980s to 8.2 percent of exports in 2006.

Last year, South Africa exported 36 billion rand ($5.17 billion) of gold and sold 720 million rand ($103.5 billion) locally, according to Alex Conradie, an economist at the Department of Minerals and Energy.

Figures are about the same for this year, with $979 million announced for new projects at old mines and in new mines, he said. Of that amount, only $43.8 million is foreign investment.

Creamer said foreign companies fear the risks of South Africa’s deep, deep mines. The biggest foreign investment came in 2005 when Vancouver, Canada-based Placer Dome bought South Deep Mine — considered the crown jewel of South Africa’s gold reserves — only to pull out a year later when a runaway skip went down a new shaft, extensively damaging the shaft. There were no injuries.

South Africa has been the golden mecca of the world since 1886, when the vast Witwatersrand gold reef was discovered in what now is the economic capital, Johannesburg. First, nuggets were easily recovered by hand. Today, South Africa leads the way in deep-mining technology. At its height, South Africa’s gold industry produced some 80 percent of the world’s supply in 1970.

While gold prices recently have climbed to highs approaching $750 per troy ounce, and the highest prices ever in South African rand, the percentage increase still is far below that for uranium, copper and platinum. Gold prices have been supported by a weak U.S. dollar and concerns about inflation.

Gold mining remains a vital part of the South African economy. It’s a major tax payer and one of the biggest private sector employers in a country with 25 percent unemployment. But the number of miners has dropped drastically even as earnings have increased, from 342,439 in 1996 — when 100,000 miners were laid off as gold prices slumped — to 137,611 in 2005.

When prices were low, miners were laid off and marginal mines also cut costs, including on workers. The cuts have yet to be reversed, even though prices are now rising. The drop in worker numbers fuel accusations that the mining industry is cutting costs to make ever greater profits to the detriment of health and safety — a charge the industry denies.

Of 119 people reported killed in South African mines last year, 113 died in gold mines. By comparison, the United States suffered five fatalities in all its metal mines in 2004, according to the U.S. National Institute for Occupational Safety and Health.

A South African commission in 1994 said each ton of gold produced in South Africa costs one life and 12 serious injuries. South Africa produces about 600 tons of gold a year.

Its poorly paid miners are the worst-off in the industrial sector, according to May Hermanus, director of the Center for Sustainability in Mining at the University of the Witwatersrand and a former government chief inspector of mines.

“Miners underground doing a terribly dangerous job still earn less than industrial workers in general and that’s the inverse for other countries where miners are paid much better than in other industries,” said Hermanus.

She said this was a legacy of South Africa’s racist past. Most miners are black, even though black entrepreneurs are increasingly entering the board rooms of mining companies.

In August, a mineworkers’ strike won wage increases of 7.5 percent to 10 percent. The average miner makes $365 to $511 a month.

Hermanus said economics should not be the only issue.

Deep mining, she said, requires “very, very special oversight and supervision and methodology” that often is absent.

“Mining at deep levels, besides the big risks that are not completely understood, I think raises a moral and ethical dilemma as to the position of miners exposed to seismic risks that are not predictable,” she said.

(Associated Press)