39% Of South African Gold Production Is Now Offline

Tyler Durden's picture

Over a month ago, when discussing the implications of the South African miner strike that will not end until all local mining companies' income statements are crippled after succumbing to wage hike demands, we said "Expect more South African mines to shutter, as gold production in the world's third largest gold producer grinds to a halt, and the local workers grasp they had the leverage all along. Should the South African example spread to other countries, then expect the price of gold to soar regardless of how much printing the central planners engage in the coming weeks and month." Today, we find out just what the final tally is , as this too prediction is proven correct: "Strikes at South African gold mines have shut about 39 percent of capacity, including at AngloGold (AGG) Ashanti Ltd. and Gold Fields Ltd. (GFI), as unofficial walkouts spread across the country in demand of above-inflation pay increases." And boom: "AngloGold, the world’s third-largest gold producer, today said all of its South African mines have been halted. Gold Fields Ltd. also lost a metric ton, or about 32,000 ounces, of production after strikes at its KDC and Beatrix operations." That's ok, Bernanke will just print more gold.

Nobody could have foreseen the complete collapse in South African mining production. From Bloomberg:

“Workers are now demanding wage increases according to the ‘Lonmin settlement’,” David Davis, an SBG Securities Ltd. gold analyst, said in a note. “Strike action may well spread from other mines to Harmony’s mines and to other industries.” Coal of Africa Ltd. (CZA) and transport workers have also been on strike.


Wage demands and direct action spread as workers sidelined traditional representatives for negotiating with management such as the National Union of Mineworkers, a backer of the governing political party. At Lonmin, workers appointed their own leaders. Julius Malema, expelled by the ruling African National Congress, has called for disruption and state control at mine operations.


Employees are gathering at the Bleskop stadium, where their appointed leaders will report back on a meeting with mine owners negotiated by the Commission for Conciliation, Mediation and Arbitration yesterday, the South African Press Association said.

Bernanke will only have to print 306,000 ounces to replace lost output (so far):

Anglo American Platinum (AMS), the largest producer of the metal, has lost about 20,000 ounces of output as workers refuse to report for duty at its Rustenburg operation, the company said today. The stock declined 4.4 percent in Johannesburg trade.


Impala Platinum Holdings Ltd. (IMP), the second-largest producer, raised pay to halt a six-week strike in January and February at Rustenburg, the largest mine producing the metal. Workers have since made new demands, Johannesburg-based Impala said Sept. 11.


More than 20,000 freight transport workers are also on strike, demanding a wage increase of 12 percent, SAPA said.


Harmony Gold Mining Co. said it’s unaffected by strikes.


AngloGold produced about 306,000 ounces in South Africa in the first quarter and Gold Fields’ KDC West and Beatrix about 212,200 ounces. The nation’s gold output was 1.35 million ounces in the quarter, the Chamber of Mines says. It was the fifth- biggest gold producing nation in 2010, according to GFMS Ltd.

As a reminder, South Africa is, well, was the world's third largest producer of gold:

In other news, the strikes will continue until gold prices collapse completely due to zero supply and ever rising demand. Don't ask - new normal math.

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LULZBank's picture

Strike Bitchezz!!!

GetZeeGold's picture



No problem......we've got some substitute referees ready to go.


Oh wait.....this isn't ESPN.



Pinto Currency's picture


Expect gold down $100 on this news. 

What a farce the manipulated markets have become.

Precious's picture

39% is offline and 1% is in a morgue.

Pladizow's picture


The sheep have access to as much GLD as they want.

Bastiat's picture

Right; and GLD reduces the tungsten risk by having so few bars.

Pladizow's picture

Bingo, lets break some golden windows with tungsten bricks!

BaBaBouy's picture

GOLD Manip Fest IS ON!!!

NYC, Same Fucking Time, Same Fucking Place...


BaBaBouy's picture

Strikes Or No Strikes, GOLD $50K, Bitchezzz...

Clashfan's picture

I hope it goes down 150. Buying opportunities should be appreciated.

They won't last much longer.

fuu's picture

I would prefer down to $150.

lincolnsteffens's picture

One day only fire sale then back to normal manipulation.

TheGameIsRigged's picture

No need to print gold....just use Tungsten...it's cheaper!!


Pinto Currency's picture


At least gold plated tungsten is something.

Imagine those investors at the LBMA who will get nothing.

LULZBank's picture

Gold is spiking up on the news...

Xibalba's picture

fundies didn't get the memo about paper gold not actually being, well.....gold.

whopper's picture

"It was probably a mistake to allow gold to rise so high."
-- Paul Volcker, ex Federal Reserve Chairman in looking back at the rise of gold from $35 to $850 during the 1970s, per "Paul Volcker: The Making of a Financial Legend" by Joseph B. Treaster


Cognitive Dissonance's picture

One does not "allow" something to do anything unless they at least believe they have control over it.

Period. End of sentence.

Cognitive Dissonance's picture

Take your hand off the mouse and step away from the computer "full stop". :>)

BTW Gold is not spiking from that news. Which sorta proves a point. The paper Gold herd ain't that much different from the stock, bond and currency herd.

They control the paper PM markets for short periods of time, long enough to do serious damage. Stampede anyone?

Abraxas's picture

CD, I agree with you and +1 you for that. The emphasis on the ending of the sentence was redundunt though.

Cognitive Dissonance's picture

I'm a redundant kind of guy.

I'm a redundant kind of guy. :)

Croatian Patriot's picture

Tungsten Bitchezz!!!

GetZeeGold's picture



Plate that crap with gold......and sell it - PT Barnum.

Quintus's picture

Thank God the supply of paper gold continues to remain as strong as ever.

fonzannoon's picture

thanks for the last sentence zh. i was just thinking, all that demand from central banks and so little supply...obviously prices have to....fall?

LULZBank's picture


In other news, the strikes will continue until gold prices collapse completely due to zero supply and ever rising demand. Don't ask - new normal math.

They are cutting down production due to failing demand and falling prices. Whats so unusual about it?

RSBriggs's picture

It's called IRONY....  Or in this case GOLDY...

Alpo for Granny's picture

However, 100% of the paper gold mines are running at full capacity.

TideFighter's picture

Very weird that the US Mint halted production of the 1/2 ounce gold 1st Spouse coins. They claim

it is a press issue, but....

Kaiser Sousa's picture

this would explain the last 3 day hit jobs on Gold and Silver right?


Van Halen's picture

I'm confused on this one. Why isn't gold spiking on this news? I just checked


And gold is way down. I would think we'd see a near vertical spike heading upward. Can anyone explain this? Thanks in advance!

LULZBank's picture

People betting against breakup of Euro finally realising their folly and dumping Gold and buying EU paper now.

Van Halen's picture

Thanks, LULZ - this is totally confusing! I wouldn't bet on the EU long term. Short term, maybe. Long term - not with what I see going on in Spain, Greece, and Portugal.

Arnold Ziffel's picture

I'm long fire extinguishers, fire trucks and ambulances....

RSBriggs's picture

People don't comprehend sarcasm or irony here, evidentally.  Something about those falling SAT scores, maybe.

fonzannoon's picture

I understand Irony. That is not irony.

Buckaroo Banzai's picture

New mine supply has a very marginal effect on the gold price. That's fundamental to the gold market due to the fact that very little gold is actually consumed, in the commodity sense.

Sheeple Shepard's picture

Gold isn't down, more pieces of paper with gold written on them are being sold than bought/U.S dollar rising against Euro because Europe is going F.U.B.A.R. Of course U.S dollar isn't actually rising just falling at a slightly slower rate than the Euro and whether more pieces of paper with gold written on is actually being sold than bought is up for debate, charts, volume don't mean a thing in a centrally controlled market. Maybe, welcome down the rabbit hole.

If a fish could talk and you asked it what it could see, the last thing it would say would be water.

Sheeple Shepard's picture

Unintended consequences of price suppression? Chickens coming home to roost me thinks, next step controls on movement of gold bullion?

Super Marco's picture

There goes the Rand.

Kina's picture

ahh yes the CFTC must be on the job today, gold naked short selling to the moon, only happens when CFTC are awake, guaranteed corruption will go unseen, is their mission.

youngman's picture

They are still working on their report..what has that been 4 years now......lol...I would have flunked that class had I turned my report in that late...

MachoMan's picture

Apparently you didn't go to college in the U.S....  that would be par for the course...  and you would also get in red ink a statement, "thank you for struggling in college, not studying, and partying all the time...  it helps my wallet".

Peter Pan's picture

The big boys have not only been content to manipulate the price of gold on the market but employers were also only too willing to manipulate their poorly paid workforces to work for a level of wages that were undignified. How many white South Africans are there that go down in the mines and work like the indigenous miners? Very few if any at all.