| South Africa - Mining History |
The discovery of the main reef
of gold-bearing
conglomerate on Langlaagte Farm near Johannesburg in 1886 did not set off
the usual gold
rush of freelance diggers. From the first moment capital was required to
develop deep underground mines.
Cecil Rhodes founded Gold Fields of South Africa (GFSA) in 1887. Rand Mines (now Randgold), Johannesburg Consolidated Investments, General Mining and Union Corporation were quickly in place, all backed by men who had started in diamonds. Only Sir Ernest Oppenheimer's Anglo American was formed rather later, in 1917, while AngloVaal was founded in 1933. These seven houses provided the foundations of the South African gold industry which was always described as the 'flywheel' of the country's expansion. (See South African Mining House Family Tree)
New technology was also forthcoming. Previously mercury had been the principal agent for dissolving out gold from crushed ore, but mercury was only effective enough to recover 65% of this gold. That was not sufficient return given the high costs of the mines. What made South African mining viable was a new technique using cyanidation called the MacArthur Forrest process patented in 1887.
By 1898 South African output was 118 tonnes (3.8 million oz), making it the leading producer, and after the interruption of the Boer War it soared to 280 tonnes (9 million oz) by 1913.
Thereafter, every few decades major new extensions to the gold reefs were discovered; the 'West Wits Line' west of Johannesburg was located by Gold Fields in the 1930s, the Orange Free State field was pioneered by Anglo American from 1946 and Evander developed by Union Corporation from the late 1950s.
By 1970, these fresh resources combined to take output to the 1,000 tonnes (32.15 million oz) record. The average grade, by today's standards, was remarkably high at 13g/t (0.42 oz). But that became increasingly hard to maintain, while the costs of putting down new shafts to even greater depths became almost prohibitive. The prospect of it costing $2 billion over seven years to bring a new shaft into production, when elsewhere open pit mining and heap leaching could, by the 1980s, get a project going in a year and profitable in two, put South Africa at a real disadvantage. Output slipped year by year, down to 700 tonnes (22.5 million oz) by 1977 and 605 tonnes (19.5 million oz) by 1990.
Consolidation led to the evolution of super-mines, formed to benefit from the economy of size and by folding a new mine into an existing one nearby, so that development costs could be written against profits of the existing mine.
But by 1990 the South African mining industry was in need of a radical rethink and restructuring, not least because of the great political changes about to take place.