The gold mining fIrm in South Africa is viewed as a normal fIrm producing gold bearing ore but faced with a quality constraint (grade). Grade, however, is never uniformly distributed in a metalliferous deposit and because high grades are mined fIrst, the quality constraint becomes increasingly severe with cumulated production. The fIrm will continue to mine gold bearing ore until it reaches its mining limit where the marginal cost of recovering the gold is equal to the marginal revenue received from that gold and at that point the economic deposit becomes exhausted. Because the mining limit is determined by cost/technology and price, it is not fIxed and thus the point of economic exhaustion may change. When high grades are mined fIrst the relationship between the tonnage of gold ore and the grade describes the rate at which the grade is expected to fall with cumulated production. In this thesis, the grade for South African Witwatersrand gold producers is modelled to fall exponentially. The mining limit, determined by costs/technology and price, can be expressed in terms of grade. By predicting the decay in grade relative to the tonnage of gold ore and applying a mining limit, a life-time size of the economic deposit can be estimated. The remaining life of a producing gold mine can then be determined and the flow of gold predicted. An empirical treatment using the disk model of a gold deposit is undertaken for a gold mine, a goldfIeld and the total Witwatersrand gold deposit. A dynamic econometric analysis of expected mining costs and gold prices is not attempted; however certain examples are used to illustrate the applicability of the model and the influence of the South African gold mining tax formula on the life of the mine.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:rhodes/vital:1015 |
| Date | January 1995 |
| Creators | Mather, Diarmid John |
| Publisher | Rhodes University, Faculty of Commerce, Economics and Economic History |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MSc |
| Format | 99 leaves, pdf |
| Rights | Mather, Diarmid John |
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