Home to the deepest gold mine and largest known gold reserves globally, South Africa has a long history of gold mining dating back to 2000 years. Today, it remains one of the world's largest producers of gold, with mining companies extracting approximately 100 tons of gold per year.
South African has some of the record-breaking deepest, biggest, richest gold mines in the world. Its potential still remains unraveled; it's estimated that South Africa holds the largest known gold reserves in the world, approximately 6000 tons.
Gold Mining in Ancient Times
The earliest reference to gold mining dates from approximately the 12th century, during the reign of the Mapungubwe Kingdom. They became prosperous with gold and copper, mined from present-day Zimbabwe and South Africa. Gold remained influential in the region even after the decline of Mapungubwe. Alluvial deposits were continually mined from rivers and streams.
Gold Discovery in South Africa
Pilgrim's Rest was the place in South Africa where gold was first discovered in 1973 by Alec Patterson. The discovery sparked a minor gold rush that attracted 1500 prospectors who ventured into the area to seek their fortunes. Mining continued in the area until the early twentieth century. Transvaal Gold Mining Estates invested in the mine and became the first South African mining company listed in the London stock market.
Witwatersrand Gold Rush
In 1884, Jan Gerrit Bantjes and Struben brothers found gold in the Witwatersrand region on two separate occasions. The area had great potential, but real development began after 1886 when large deposits were discovered by a young Australian man named George Harrison. The gold rush following the discovery was the first great mining rush in South Africa. The discovery was a key moment for South Africa's economy, transforming it from an agrarian to an industrialized economy within one generation.
Extensive surveys by the government found that Witwatersrand contains gold from the surface to a depth and everywhere around, which further increased investors' confidence. As a result, the arid goldfield of the Transvaal Republic became a metropolis now known as Johannesburg, which would become Africa's largest city and one of the world's leading mining regions. It's now home to almost 14 million people.
The first large mining company, Witwatersrand Gold Mining Company, began its operation in late 1886. In the next two years, more than 50 companies were operating in the area.
Golden Era Gold Mining in South Africa
Between 1886 to 1890, the government took many initiatives to regularize the gold mining industry and provide security to investors. A mineral council and a stock market were established to help the industry grow. Many new mines were brought into operation, and by 1899, South Africa became the leading gold producer in the world.
The Anglo Boer War (1899-1902) was a critical time for South Africa's economy as it first shuddered and then collapsed after the British empire annexed the Transvaal Republic. Mining companies were taken over by the British, and production declined steeply.
Over the next two decades, South African mines recovered slowly and played a crucial role in South Africa's economic revival.
In the mid-century more goldfields were established in Klerksdorp, Welkom and Kroonstad. New mechanized mining techniques resulted in a significant increase in production. In 1970, the country produced 1,000 tons of gold, reaching its peak production. Despite years of mining and contribution to the South African economy, Witwatersrand mine is still the world's largest operational gold mine.
Over its history, South African gold mines have been at the center of labor disputes and strikes, which have played a significant role in shaping labor relations in the country. There have been two general strikes in 1973 and 1987, which saw major clashes between the representatives of labor unions and the mine owners.
Present and Future of Gold Mining in South Africa
South Africa's gold industry has faced several challenges in the past two decades due to dwindling reserves and increased costs. It is estimated that 79% of South African mines are not profitable, and the industry has seen a massive number of job cuts.
The impact of these challenges can be seen in the diminishing contribution that South Africa makes to global gold production. In 2002, South Africa accounted for 15% of all gold produced globally, but by 2019 it had decreased to 4.2%.
Today, South Africa has around 80 operating gold mines and a handful of small-scale producers. The industry employs about 95,000 people, although the number of jobs fluctuates with changes in production. Gold mining boosted South Africa's gross domestic product by 360.9 billion Rand in 2019, compared to 351 billion Rand in 2018.
The country continues its push to diversify its economy to become a world-class mining center. It is also focused on growing African economies in different parts of the continent, bringing in many investors from China and other countries.