During his early years as a miner in South Africa, Joas Mahanuque spent six hours a day on his knees drilling for Impala Platinum Holdings Ltd. The dust-filled tunnels half a mile underground were too low for him to stand, and temperatures reached 105 degrees Fahrenheit (40 degrees Celsius).
Today, he has essentially the same job 2.5 kilometers (1.5 miles) beneath the surface for Gold Fields Ltd. But unlike most of the precious-metals miners in the country, Mahanuque sits comfortably atop a new 7-ton vehicle, using a joystick to control an 8-foot drill as ventilated air blows behind him.
“It’s not hard,” the 37-year-old said while taking a break under the bright tunnel lights of South Deep, the country’s only fully mechanized underground gold mine. “You just sit and operate and make money.”
If only it was that easy for the rest of the once dominant South African gold industry. After more than a century as the world’s top producer, the country has slipped to No. 7 over the past decade. Mines are deep, labor intensive and are being developed with mostly drill-and-blast methods little changed since the 1950s, which means costs have soared and output has dropped.
But even after all those years of digging, South Africa still has the third-largest gold reserves. So, companies like Gold Fields are investing in new technologies to make extracting the ore more profitable. The opportunity is vast. South Deep has 37.3 million ounces of reserves in the ground, which means it is capable of producing 500,000 a year for at least six decades.
“South Africa is endowed with an unbelievable mineral resource,” said Neal Froneman, the chief executive officer of Sibanye Gold Ltd., the biggest producer of South African gold. “If we don’t have this shift to a new way of thinking about technology, we are going to sterilize resources. The industry will be dead by 2033 if we don’t change.”
The problem is that cutting costs and reviving output has been difficult. An estimated 80 percent of the industry’s output still comes from workers using hand drills in narrow tunnels rather than the bulk mining techniques employed elsewhere. South Africa unearthed just 140 metric tons of gold last year, down 58 percent from 2004.
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