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Former South Africa top producer rues lost shine as gold prices spike

Duncan Wanblad, a South African mining veteran, lamented Wednesday the country's missed investment in mining as gold prices surged above $4,000 per ounce - a record high fueled by expectations of reduced interest rates and demand for safe haven assets.

Anglo American Plc's CEO Duncan Wanblad said that the mining potential of South Africa was not fully explored "due to the unsupportive exploration policy in the past 20 years".

"That is a critical part of the mining life cycle." Wanblad explained that the data shows that it takes 17 years to get a deposit permitted, ramped up and in full production.

He added, "It is a generation that has been sacrificed."

Gold prices soared to a record high of $4,000 per ounce on Wednesday. This was a result of expectations for lower interest rates, and a demand for safe havens. The rally came as mining executives met in Johannesburg to discuss their industry's future.

The recording brought back memories of the visit made by Bobby Godsell, a South African mining executive, to Washington and London in 1992 to lobby against a gold sale. He was desperate to prevent prices from falling below $260 per ounce.

South Africa, at the time, was one of the top three gold producers in the world. Its output averaged 400 metric tonnes per year. The country's gold production has dropped from 1,000 metric tonnes in 1970 when it was the world's leading producer to 90 metric tonnes last year.

South Africa's deep, old shafts cost more to operate today compared to their competitors in Africa, Australia and Canada.

South African mining executives also said that policy uncertainty, infrastructure problems and labour unrest were preventing investment in exploration and mine development.

Gold Fields (founded by Cecil Rhodes 1887), Harmony Gold, and AngloGold Ashanti, the former gold division of Anglo, acquired assets in Africa, Australia, and America. Reporting by Nelson Banya and Editing by William Maclean

(source: Reuters)