South Africa overtaken by China as world’s top gold producer

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Since 1905, South Africa has been the world’s top producer of gold. That has now changed, due to an increase in production out of China (helped, it has been pointed out, by Canadian companies). And by a decrease in South African production – down 8.1% over the last year alone – due to the reality that it is becoming increasingly expensive to extract gold from the large South African mines due to the depths at which they now have to tunnel.

In fact, there is a rising concern that some of the big South African miners, beset by said rising costs, will soon be hanging “Gone Fishing” signs on their mine shafts. The only way to avert a rapid decline is with far higher gold prices than currently on offer.

Any way you look at it, the structure of the world’s gold production is shifting, with the big deposits harder and harder to find, and the existing ones in steady decline.

Source: David Galland, Casey Research – The Room, January 18, 2008.

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