July 30, 2012
By Frank Holmes, CEO and Chief Investment Officer, U.S. Global Investors
In 2011, the South African gold fields produced only around 6 million troy ounces of the yellow metal, placing them fourth behind China, Australia, and the U.S. in producer rankings. This is a far cry from the peak reached in 1971, when, according to the South African Chamber of Mines numbers, they produced 79.0% of the gold mined globally. For the mines to remain open, they must mechanize, which will require more energy. While the government may oppose cutting more jobs, you just can't send workers two-plus miles underground and rely on people and muscle power to achieve the productivity needed to cost-effectively mine the gold.
Source: This was excerpted from U.S. Global Investors' Advisor Alert, July 20, 2012, www.usfunds.com.
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