Over the last few years, the price of gold has dropped continuously. The main reason is the reduced demand for gold on the world market, because fewer currencies are being backed up by gold reserves. Also, competition from Russia and Australia puts pressure on the gold price, because their gold mining is easier and cheaper.

The gold mines in South Africa suffered a heavy crisis temporarily, and in 1995 more than 100,000 workers were laid off. So far, the industry has been saved from ruin by down-sizing, establishing co-operatives and the weakening currency, although many mines have reached their limit of profitability and at times even work below it.

The South African economy has, in recent years, succeeded in reducing its dependency on the gold price. In general, the economy is striving to shift away from its one-sided orientation as a raw material exporter. In future, the proportion of semi-finished and finished products in the entire export volume shall be increased by a capital-intensive modernisation of the industrial structures, which became outdated through the isolation of the apartheid era.

Mining in South Africa

South Africa is particularly rich in mineral resources and is one of the leading raw material exporters in the world. The main mineral raw materials are gold, diamonds, platinum, chromium, vanadium, manganese, uranium, iron ore and coal. These goods make up about 60 % of the entire export. With platinum, manganese, vanadium and chromium, South Africa is number one globally, as far as mineral resources as well as the actual mining and export volumes are concerned.

Gold mining still holds a special position. 40 per cent of the world's gold reserves are still to be found in the Witwatersrand area. But the gold-bearing stone has to be mined with considerable technical expenditure from great depths (down to about 4,000 metres). To produce one fine ounce of gold, on average about 3 tons of ore, 5,000 litres of water and 600 kilowatt hours of electricity are required.