South African Mining in Danger

South Africa Mining Could be Disrupted

After the murder of South African politician Eugene Terreblanche, tensions have skyrocketed in the country, generating concern the mining industry could take a huge if things escalate out of control.

Radical senior member of the African National Congress, Julius Malema is making things worse, as he called for all mines owned by foreigners in Africa to be nationalized.

Terreblanche was murdered by being hacked to death by machetes, while a couple of young men were arrested for the murder.

As these events could go either way, there is extreme uncertainty as to the validity of the mining industry in South Africa if violence erupts on such a scale as to interrupt the industry. That could cause commodity prices to rise in response to the supply problems which would result from the upheaval.

Most major mining companies have an interest in South Africa, but it would do more harm to the country itself than even those companies would experience.

Mining minister Susan Shabangu has stated there would be no state takeover of the mining industry "in her lifetime."

While that may be true, Malema thrives in times of chaos like these, and if he continues his rhetoric, there could be extraordinary violence where nobody knows where it could end.

Terreblanche was considered a white supremacist, making the likelihood of extremists on all sides of the issue and events ready to enter into battle.

Commodities: South African Gold Production Down

Gold production falls in South Africa, although other commodities do better

In terms of volume, South African gold production has fallen by 14.4 percent in October. Mineral production fared better for the country, as overall it gained 3.5 percent over October 2007.

That will harm the country as gold futures and gold commodity prices will continue to go up over the next several years, especially as the economic conditions continue to deterioriate.

Gold futures trading will be one of the few sectors that not only provide safety for commodities investing, but for all investors as well. The gold commodity price will provide good returns along with a haven, making gold as a commodity a surety to continue to rise in value.

Take out gold and mineral production rose by 6.5 percent, according to the South African Web site.

Much of the decline is attributed to the ongoing electric power grid, which state-owned Eskom seemingly is not able to fix.

At this time Eskom has cut back on power supply to mines to about 90 to 95 percent.

Numerous factors continue to hamper consistent commodity success in the country. If they can deal with infrastructure and safety problems more efficiently, the country would thrive, especially in metals.