SAfrica 2008 Gold Output Lowest Since 1922

Despite the decline in production, South Africa`s gold mining sector was still a crucial part of the economy, the Chamber said.

South Africa's gold output fell by 13.6 percent to 220,127 kg in 2008, the lowest level since the 218,031 kg produced in 1922, the country's chamber of mines said in a statement on Tuesday.

A power crisis last year which led to mines shutting for a few days and the mining of lower grades had contributed to the decline, the Chamber said in a statement.

In the fourth quarter of 2008, South Africa's total gold production decreased by 0.9 percent to 55,242 kg when compared to the third quarter of 2008, the Chamber said.

On a year-on-year basis gold production was down by 10.7 percent in the fourth quarter.

The closure of gold mines due to a major power shortage in South Africa from 24 to 31 January last year was the first time the gold mining sector had been closed since the Anglo Boer war between 1900 and 1902, the Chamber said.

"The 13.6 percent decline was also the largest single drop in gold production since the strike-induced 13.8 percent decline in 1922," the Chamber said.

In 2008, South Africa slipped to number three in the stakes of the world's main gold producers after China and the United States, the Chamber said. South Africa fell behind China in 2007 to become the world's third largest producer.

The Chamber quoted metals authority London-based GFMS Ltd. which has said world gold production fell by 4 percent in 2008, largely doe to large declines in output by Australia, Indonesia and South Africa.

Despite the decline in production, South Africa's gold mining sector was still a crucial part of the economy, the Chamber said.

In 2008, South Africa's gold mining industry employed 166,000 people and accounted for about 2.5 percent of the country's gross domestic product. It earned about 7 percent or about 48 billion rand ($4.77 billion) of the country's exports.

South Africa's Chamber of mines groups the country's big gold miners and negotiates on their behalf with either the government or workers unions.

Its members include AngloGold Ashanti, Gold Fields and Harmony, which are respectively the third, fourth and fifth biggest world producers of the yellow metal.