Johannesburg - Gold producers must revolutionise their mining methods, become more tech-savvy and increase the use of automated machinery to survive in an environment of low prices and declining ore quality, said Gold Fields CEO Nick Holland.
With gold becoming more difficult to find and expensive to mine, companies must adapt by embracing three-dimensional modelling, better data analysis and more sophisticated machinery, Holland said in a lecture at the Gordon Institute of Business Science in Johannesburg on Wednesday.
"The journey toward not just mechanisation but automation and digitisation has begun and it’s only going to exponentially grow from here," Holland said. "As that bus is picking up speed we’d better get on it."
The price of gold has tumbled almost 40 percent since its peak in 2011, squeezing producers from Peru to Australia that have relied on old mines with declining ore grades for profits. The average all-in cost of the 11 major producers tracked by Bloomberg Intelligence was $918 an ounce in the second quarter. Gold for immediate delivery traded at $1 168.10 an ounce at 2:03 p.m. in New York on Wednesday.
Partnerships with technology firms, as well as governments, universities and local communities, will help reverse this tightening of profit margins, Holland said.
Gold Fields, based in Johannesburg, is employing more modern techniques at its South Deep gold mine in South Africa, Holland said. South Deep has struggled to meet production targets due its complex ore body.
BLOOMBERG