The investment into Randlord Consolidated Mines (Pty) Ltd. in part comes from Peter Skeat, who helped pioneer modern, surface gold mining in South Africa and has run companies including Afrikander Lease Ltd., Mintails Ltd. and Galaxy Gold Mining Ltd.
The 6,000 residents living on the mine, a legacy of the operation’s heyday when it owned a town, clinics and a golf course, are hoping Randlord get it right. When the operation went into liquidation in 2013, 1,700 workers lost their jobs and the mine fell into ruin with the surrounding area beset by crime.
“We had murders, we had a mass rape, it was a real mess,” said Pule Molefe, 37, a former mineworker who lives in the town, also named Blyvooruitzicht. “The municipality came in and cut off our water supply. They wanted to cut electricity also.”
Underground Mining
At current gold prices, which averaged about 600,000 rand a kilogram in the first quarter, Randlord estimates it can make profit margins of about 40 percent. The cash generated will be used to reopen Blyvooruitzicht’s underground mine, which is about 3 kilometers (1.9 miles) deep and contains 9 million ounces of gold resources, a figure that could rise to 40 million with further exploration, according to Karel Potgieter, one of the brothers’ partners.
“We didn’t make the investment in the shaft just to think about what we’re going to do,” said Potgieter, 33. “Our intentions are absolutely to go underground.” Gold fell 0.9 percent to $1,220.33 an ounce at 2:31 p.m. in Johannesburg Wednesday.
A key reason why previous operators such as DRDGold and Village Main Reef couldn’t make Blyvooruitzicht profitable was because they had to pump water from mined-out areas to access the gold. After the operation went into liquidation, AngloGold Ashanti Ltd., the biggest gold company based in Johannesburg, took on the pumping costs to save its nearby mines from flooding.
“We’re young but we want to build a legacy, a good legacy,” said Dane Viljoen, who named Randlord after the term given to entrepreneurs such as Barney Barnato, who was among those who controlled South Africa’s mining industry in the 19th century. “We want to be the guys that build libraries, put money into universities.”
After production started in 1942, profits from the Blyvooruitzicht mine flowed through the mining village and the town of Carletonville, four miles away. Within a decade, Blyvooruitzicht was said to be the most profitable gold mine to date, according to the 1968 book Golden Age, chronicling South Africa’s mining industry. Dividends of 100 percent or more were paid out for five straight years, the book said. The operation is situated in the Witwatersrand Basin in central South Africa, a geological deposit billions of years old that’s produced a third of all the world’s gold.
Mariette Liefferink, who runs non-governmental organization Federation for a Sustainable Environment, says Randlord may struggle if they don’t reinvest profits in the local community and fix the environmental damage the mine has caused in the past.