Human cost up in SA mines

More than 50 people have died in the country’s mines in 2018, roughly the same number as this time last year. While annual death tolls are far lower than the 615 recorded in 1993, which was the last full year of apartheid, 2017 witnessed the first rise in 10 years.

Most of the gold mining fatalities are due to workers being crushed under falling rocks, caused by more frequent tremors as companies dig deeper, in some cases reaching depths of more than 4km. Government is investigating Sibanye Gold’s operations, where more than half the gold mining deaths occurred this year.

The death toll is the bleakest possible illustration of the human cost to mining in SA. It also raises questions about the long-term viability of an industry that now faces competition from cheaper, shallower mines, from Ghana to Canada.

While SA’s producers insist keeping miners safe is their first priority, taking mines deeper and deeper poses severe challenges. The main problem is geology. Pressure from billions of tons of overlying rock results in tremors as gold is extracted from narrow seams, putting the labour-intensive industry close to the limits of human endeavour, according to Nick Holland, CEO of Gold Fields.

The department of mineral resources is investigating complaints some workers are being victimised for refusing to enter what they see as unsafe areas, chief mines inspector David Msiza said in August. Some deaths could have been prevented, he added.

Some analysts are also concerned. More than 20 deaths at Sibanye this year undermines its investment case, Citigroup analysts Johann Steyn and Shashi Shekhar said in July. Citi said it was concerned Sibanye had reduced oversight and mined highgrade pillars previously considered “too dangerous” to exploit.

Sibanye CEO Neal Froneman has said Citi’s information is inaccurate, adding that the company was committed to safety. Company spokesperson James Wellsted said the analysts’ conclusions were not backed by data.

Gold Fields has reported no fatalities this year, but its struggles to turn around its unprofitable South Deep deposit mirror some of the challenges facing SA.

While SA has the world’s largest gold reserves after Australia, declining profitability may deter the investment required for more mechanised operations. Gold Fields and AngloGold Ashanti have whittled down their SA operations and are ramping up output in West Africa, Australia and South America, where mining costs are lower.

Even if miners can restore profitability, the technology to mechanise SA’s gold mines doesn’t currently exist, said Raymond Durrheim, a professor of geosciences at Wits University. “With current methods, seismicity will continue to be with us.” – Bloomberg