The uneconomic production of gold in South Africa

The price received for a commodity decreases as the quantity sold increases. all other factors remaining the same. This has been the position with gold since it was demonetized in August 1971. The result is that the marginal revenue per kilogram of gold decreases steadily with increased production. If operating losses are to be avoided, the marginal cost of production must not exceed the marginal revenue. This requirement, although not seriously violated by most invididual mines, is not met by the industry as a whole, resulting in large losses of income to the State and the shareholders. These losses are increasing, and a way of curbing or reversing this trend is described.