Gold mining: In the devil's workplace

Digging for gold at ERPM - so deep the rock is hot

The price of gold is tumbling; in South Africa, mines are closing down; a huge industry and thousands whose livelihood depend on it are in trouble. The BBC's Rodney Smith, once a gold miner himself, reports.

ERPM is closing ...
... and so, probably, is Lebanon, and at least four others. Their names are not widely known outside South African mining circles. But their loss will mean the passing of a significant phase of industrial history.

East Rand Proprietary Mines is 108 years old. Almost three miles down, it was the deepest mine until that crown was stolen by Western Deep Levels, 50 miles west along the curve of the Rand, whose rich reefs once produced the bulk of the world's gold.

In the devil's work place

Mining for gold is hard work, and not very well paid

But South Africa's mines have been priced out of the market.

Nothing can make deep-level mining cheap. Ingenious South African mining engineers have been at the forefront of developing clever advanced mining techniques, some, like chemical leaching in situ, more like oil recovery than ore winning.

But all of South Africa's significant gold deposits are very deep underground, miles down, at depths that ordinary human beings find hard to comprehend.

The shafts are so deep that the country rock is hot to the touch. The devil's workplace.

Hoist driver Hennie Swart has too much time on his hands, now that ERPM mine is closing down

And like the devil's workplace, working at these depths is very dangerous. Newspaper reports talk of mine cave-ins and shaft collapses.

The real thing is far nastier, where the pressure builds up in deep level rock until the whole tunnel explodes inwards, footwall, hangingwall, sidewall, the lot, crushing completely anything in its way.

Working places take hours to reach, by not one hoist but a series of hoists at different depths. The technology does not exist to build a single-pull hoist to these depths. The weight of the rope itself would swiftly overcome its own strength, and it would break.

The glory days

Now such mines may soon be history.

Lebanon's Harvey-Watt shaft, named after a famous British mining engineer, is a landmark to incoming workers from miles away across the highvelt. It's neighbour to the north, Venterspost (most mines are named after the old Transvaal farms on which they were prospected) opened up the West Wits Line of magnificent mines in the 1930s.

Arriving for a day's work underground, but soon the mine shaft will fall into disuse

Its peak was West Driefontein, now simply Driefontein Consolidated, where the almost invisible lead-pencil-line of the Carbon Leader Reef single-handedly, as it were, produced a 20th of the Western world's gold.

ERPM and Libanon and the others will join names like Sub-Nigel, Wit-Nigel, Marievale, the infamous, to mining students, Vogelstruisbult, and next door, Vlakfontein, famous for its syncline ore body, a J-shape where you went down one side to go up the other, and where the No 1 Shaft collar was the coldest recorded spot on the East Rand.

Pulling the plug

The South African government, the major shareholder in ERPM, is about to pull the plug on this venerable mine, after a decade of expensive public subsidy.

A family depends on his income from mining deep underground

The cost will be the loss of 5,000 mines' jobs, with the hardship for families and local traders and suppliers this will involve.

The government's tough line is the inevitable response to the mounting evidence that the gold price is on a slide. It has fallen more than 10% since May, when the British government said it would sell more than 400 tonnes of gold over the few years.

Mining gold, mining coal

There is a parallel with Western Europe, where coal mining became uneconomic in the 1970s. By then, like the South African gold mines, they had become major employers in economies where jobs counted almost more than economic output.

South Africa's miners have been demonstrating against the sale of gold by the world's central banks

In Britain the transition was painful. Only slightly less so in Germany and France. Whole communities that had once damned underground labour as dangerous and degrading now wanted it continued - because, like life, the alternative was worse.

Britain, Germany and France had discovered they could import coal more cheaply from elsewhere.

Miners had been priced out of their markets. It was no fault of their own; they were never hugely well-paid, although productivity sometimes undoubtedly had been wanting. But other technologies had moved on, and it was easier and cheaper to import from elsewhere.

Deep levels, high costs

Something similar has happened to South Africa's gold miners.

The Ashanti gold field in Ghana - where miners just need to scratch the surface to find gold

South Africa's deep mines are competing with modern, opencast gold recovery which can be ridiculously cheap by their deep level standards. North American and Australian miners can cut the tops off low-grade mountain deposits, crush them, soak them in cyanide and suck the gold from the liquor. Low cost, low labour, needing only time to do the job.

These are the miners who have also perfected the business of selling their gold forward. Rather like Chicago's famous future market in pork bellies, they have sold gold not yet produced, and that itself has contributed to the metal's problems.

Reality sets in

If ERPM does close, it will reflect courage and a sense of economic reality within the South African government. Maybe it can prevail on the gold mining companies, which are among the wealthiest in the world, to put back into the industry some of the riches they have made for their British and American shareholders over the years, wealthy pension funds, rich insurers, so that miners may be retrained for other careers.

The Europeans have shown how this can be done.

Don't count on it, though. I discovered little enthusiasm to expand beyond existing retraining programmes when I talked to senior South African miners a year ago.

In the absence of a major economic calamity the gold price is not likely to recover in the near term. No commodity, and gold is a commodity, has survived having surpluses thrown on the market on the scale proposed by Britain, by the Swiss and the International Monetary Fund.

The fate of silver

The object of desire

Silver suffered a similar fate after it was demonetised at the end of the last century. The price fell over time, and has never (in spite of the Bunker hunts' valiant efforts in 1980) recovered to its currency-value level.. Gold could do the same.

But it is sad to see an institution like the South African gold mining industry slow down and slip away. It once was upstanding and proud, the best in the world.

Approaching West Driefontein when I worked there many years ago, you could see the headgear from miles away. But when I returned last year, it was a scruffier place, not like the sparkling industrial giant it had once been.

All miners know there is a limit to every discovery. It's one of the rules of mining.

The excitement is in making a new discovery.