Industry expert calls for urgent resuscitation of SA’s gold sector

Senior gold industry executive and CEO of Lions Bay Resources, Lloyd Birrell, believes urgent interventions are needed to pull back the decline in the country’s gold mining industry.

While South Africa is still among the big players in the global gold market, the country has been surpassed by a number of countries, including China and Ghana.

Mining in South Africa faces increasing challenges, including declining ore grades and increasing operational costs affecting the bottom line.

Calls for lower electricity costs are among the demands from miners squeezed by prices.

According to Mining Weekly, local gold production has been shrinking at an average rate of 5.8% a year since 1994, falling from 580 tonnes to less than 90 tonnes in 2024.

Last year, China’s production of the precious metal was almost four times South Africa’s production.

Although gold prices have come down from the January 29 highs, the precious metal surpassed the $5, 500 mark per ounce this year.

Birrell explained: “It’s extraordinary that at a gold price like this, South Africa’s gold mining has declined to the extent that it has.”

Birrell’s Lions Bay Resources is among the interested bidders for the derelict Lily Gold mine near Barberton after its 2016 closure.

But the process to get the mine out of business rescue remains stalled by a series of litigations.

Lily Mine is the site of the 2016 tragedy where three mineworkers were trapped underground in a container following a fall of ground accident.

Their remains were never retrieved. Birrell was among those at the mine on Thursday, where the families of Pretty Nkambule, Yvonne Mnisi and Solomon Nyirenda marked the 10th anniversary of the tragedy.

He believes his firm has the capital and expertise to revive the now-flooded Lily Mine, which is a complex and technical process.

“Now, our plan is, because we know what the disadvantages or the difficulties with Lily are, is that we would open Brookbrook, and we could use all the infrastructure and the deposition available. We would be operating underground in Barbrook within nine months. We have the capacity and the operation, operational capacity, and the plant is there. We can do it in nine months. So, we can catch up some time, and then we can, then we can spend the next three years dewatering and reestablishing lily, said Birrell.”