Mines deepen as gold climbs

South Africa’s gold companies, already mining at the world’s deepest depths, are looking to plumb even deeper veins in a new gold rush spurred by record prices.

The deeper miners go, the richer the ore being uncovered. The price in dangers, though, includes rockfalls, poisonous gas explosions, flooding and earthquakes.

That has stirred up concerns about the safety of miners, who experts say have the worst lot among South Africa’s industrial workers.

Some foreign companies have been deterred by the risks here. But Gold Fields Ltd., the country’s second-biggest producer after AngloGold Ashanti Ltd., is ready to set a record, digging deeper than 2.5 miles at its Driefontein mine.

A worker was killed there in September by a tremor at just below two miles. By comparison, the deepest mine elsewhere in the world is in Ontario, Canada, at 1.5 miles.

Harmony Gold Mining Co., the world’s fifth-largest producer, wants to develop a mine below an existing one at Elandsrand, at a depth of about two miles, which it says would extend the life of the mine by 18 years.

Some 3,200 miners working to deepen the mine shaft there in September were trapped more than a mile underground. They were rescued after some spent nearly three days underground.

At a neighboring mine, two people were killed in an accident a week earlier. And 25 workers mining illegally died in a fire at an unused part of a Harmony mine in early October.

Gold prices topping $800 an ounce on a weak dollar and concerns on inflation have spurred miners to work ever deeper in marginal mines. In 2005, nine mines employing 69,000 workers were considered marginal or loss-making. Today, mining deeper, they’re profitable.

Although many miners say it’s possible to go deeper and to do so safely, the country’s Chamber of Mines has set up a committee to consider the dangers.

Despite the bonanza, South Africa’s gold production continues to fall as resources have been depleted. The United States is threatening to win its top position in the world, with Australia and China lagging far behind.

According to the Chamber of Mines, South Africa’s production has fallen from a high of 1,000 tons in 1970 to 275 tons last year. Exports fell from 50% of the country’s total in the 1980s to 8.2% of exports in 2006.

Last year, South Africa exported 36 billion rand ($5.17 billion) of gold and sold 720 million rand ($103.5 billion) locally, said Alex Conradie, an economist at the Department of Minerals and Energy.

Gold mining remains a vital part of the South African economy. It’s a major source of tax revenue and one of the biggest private-sector employers in a country with 25% unemployment. But the number of miners has dropped drastically from 342,439 in 1996 -- when 100,000 miners were laid off as gold prices slumped -- to 137,611 in 2005, even as earnings have increased.

Of 119 people reported killed in South African mines last year, 113 died in gold mines. By comparison, the United States suffered five fatalities in all its metal mines in 2004, according to the U.S. National Institute for Occupational Safety and Health.

The poorly paid miners are the worst off in the industrial sector, said May Hermanus, director of the Center for Sustainability in Mining at the University of the Witwatersrand and a former government chief inspector of mines.

In August, a mine workers’ strike won wage increases of 7.5% to 10%. The average miner makes $365 to $511 a month.