Thomas White Global Investing
South Africa
South Africa Stamp
July 25, 2008
A Postcard from South Africa
South Africa: The Birth of a Golden Ring

Golden Ring Deep in underground shafts of over 2.36 miles, South Africa holds 41% of the earth’s treasure trove of gold

Deep in the bowels of a dark shaft in Driefontein in South Africa, miners light up a tunnel of swiveling earth. Fine dust shimmers through their flashlights. The air is damp. Musty. Yet, the fragrance of rich dark earth lights up the passage. In a way, the earth here is truly rich. Hidden deep within its embrace is one of man’s oldest known desires –that elusive yellow shimmering metal called gold.

As the rest of Africa, Driefontein, has an abundant gold history – in the past 50 years this mine has delivered more gold than any other. Almost 3000 tons of the precious ore. In the 2005-06 financial year, Driefontein produced 1,150,000 oz of gold from 6.87Mt of ore milled. But this is not enough. As demand soars, miners find that vast shores of the earth have already been depleted, and they must retreat deeper and deeper into the darkest burial vaults of the earth, where no light of the sun has ever passed. By 2011, miners will be working more than two miles down at Driefontein. Much of the gold makes its way to India, the world’s largest gold consumer with an annual demand of 800 tons.

In one of the many jewelry stores that line the dusty crowded streets of Mumbai, on display nestled against the white cotton is a single ten-gram gold ring. Exquisitely perfect and tiny. And precious. Yet, infinitely more precious than the price is the fact that the ring encompasses all of earth’s gifts and inexhaustible human labor and skill. If the ring could tell a story of its birth, what would it be? A tale of sweat, dirt and muscle. Two tons of rocks were blasted from Driefontein’s mines. These dark rocks were treated and splashed with cyanide. After another 5,000 liters of water and 600 kilowatts of electricity emerges the gold. Not much of it. But enough gold for one solitary ten-gram ring. Driefontein has met Mumbai. And man has met his ultimate desire.

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