Part 12

The ascertainment of the proximate gold contents of the Transvaal mining area leads up to the question, How and when is this stupendous wealth to be rendered available? In other words, what is likely to be the gold production in the several years from now on, and how long will this rate of production continue? or what are the chances of the early exhaustion of the mining industry? To take the last item first, it is the growing conviction of Rand mining engineers that the amount of available gold is only limited by the extent to which mining operations can be prosecuted below the surface. Mining engineers had up till recently generally agreed to fix a depth of 8000 feet as the utmost limit to which mechanical appliances and other circumstances will allow them to follow the descent of the reefs, and the available gold yield is calculated on this basis. But there is no finality in this statement of depth, and already, as we have remarked, engineers are calculating for deeper delvings, and 9000 and even 12,000 feet have been spoken of. This latter increase of 4000 feet--from 8000 to 12,000 feet--would alone augment the gold estimate by 50 per cent. For the rest, and retaining the 8000 feet limit estimate as the measure of the exhaustion of the present Rand, this is naturally controlled by the rate of production per year, which itself is dependent on the particular circumstances of the industry during the period in question.

The yearly production of gold from now onwards offers no insurmountable obstacle to a fairly exact appreciation. It is merely a rule of three calculation: if in the past, under given circumstances, working results have been as follows; in the future, with the same or like circumstances, the results will be such. Various computations from time to time have been made on these bases, among the most recent being those of Mr. Cooper-Key and Dr. Hatch in 1899, Mr. Goldring and Mr. Bleloch in 1901, and quite recently Messrs. Leggett and Hatch (on 47 miles of the Rand only, and working to depths of 4000 to 7000 feet). Mr. Cooper-Key's forecast, which was made in 1899, was for the output of the three following years, the war not having then been anticipated. The basis of his calculation, like that of Mr. Goldring's, was the number of stamps or the milling power employed. If in 1898, he argued, there were in work on the Central, Eastern, Far Eastern, and Western sections of the Rand 6000 stamps, at the end of 1899 this number would probably be increased by 165, or to a total of 6165; at the end of 1900 the increase made would be 1730 and the total 7895; at the end of 1901 the total would have risen to 9845; and at the end of 1902 to 11,785. On the basis of 1800 tons milled per stamp, of an average value of £2 per ton, and with an average number of stamps of 7000, 9000, and 10,500 in the three years, the output would have been: 1900, £25,200,000; 1901, £32,400,000; and 1902, £37,800,000. Mr. Goldring, who is the Secretary of the Johannesburg Chamber of Mines, likewise framing his calculation on certain yearly increases in the milling power, calculated that in the five years following the full resumption of mining operations, 17,000 stamps would be at work, or an increase of 11,000 on the number before the war. Allowing for a fall in the grade of ore milled, in consequence of cheaper methods permitting of a lower grade of ore to be dealt with, the 17,000 stamps, he considered, would produce at least £50,000,000 sterling a year. Writing before the war, and basing his estimate on observations made by Mr. Eckstein that in five years the number of stamps in working would be 12,000, Dr. Hatch, likewise following the milling power basis, calculated for a yearly gold production of £36,000,000. Mr. Bleloch's opinion, taking the production in the nine working months of 1899 of £20,000,000 as a basis, is that the rate of production would probably double itself after the war. "If this be so," he adds, "in fifty years' time the product of the Rand will have reached over £2,000,000,000, and if such an accelerated progress is made, the whole of the vast amount now estimated may be dug out of the Rand within sixty or seventy years." The latest estimate published, that of Messrs. Leggett and Hatch, going on the basis of the average increase of production of £4,000,000 per year in the three years before the war, and that the production in 1899--a broken year owing to the war--was £19,000,000, concludes that, allowing eighteen months from January 1, 1902, for the industry to be restored to the conditions existing in August 1899, a similar increase of production will bring the output to at least £30,000,000 per annum by June 30, 1906, and if this rate of production were to be maintained from then on, the total production of £1,233,560,700 would give a life from January 1, 1902, of forty-two years and a half. But as the production will decline gradually, instead of coming to a sudden stop, the life of the industry is likely to be prolonged for some considerable number of years beyond the period indicated. If, on the other hand, the annual output should exceed £30,000,000 for any considerable period, as is, perhaps, within the bounds of possibility, this would partially offset the extension of life due to the gradual decline of production. It is to be added, in explanation of Messrs. Leggett and Hatch's estimate, that it contemplates working along a strike of forty-seven miles only, and to the restricted depth of from 4000 to 6000 feet.

The following tabulated comparison of these several estimates will assist their comprehension, it being explained that Mr. Bleloch's estimate is reduced to the extent of 25 per cent. as a set-off for probably barren sections, &c.:--

+-----+--------------+----------+------------+---------------+-----------+ | | | | | Messrs. | | |Year.|Mr. Cooper-Key|Dr. Hatch |Mr. Goldring|Leggett & Hatch|Mr. Bleloch| | | (1899). | (1899). | (1901). | (1902). | (1901). | +-----+--------------+----------+------------+---------------+-----------+ | | £ | £ | £ | £ | £ | |1898 | ... | ... | 20,000,000 | ... | ... | |1899 | ... | ... | ... | 19,000,000 | 20,000,000| |1900 | 25,200,000 | ... | ... | ... | ... | |1901 | 32,400,000 | ... | ... | ... | ... | |1902 | 37,800,000 | ... | ... | ... | 15,000,000| |1903 | ... | ... |} |} | 20,000,000| |1904 | ... |36,000,000|}50,000,000 |} | 25,000,000| |1905 | ... | ... |} each year |} |} | |1906 | ... | ... |} |} |} | |1907 | ... | ... |} |} |} | |1908 | ... | ... | ... |} |} | |1909 | ... | ... | ... |} |}35,000,000| |1910 | ... | ... | ... |} 30,000,000 |} each year| |1911 | ... | ... | ... |} each year |} | |1912 | ... | ... | ... |} |} | |1913 | ... | ... | ... |} |} | |1914 | ... | ... | ... |} |} | |1915 | ... | ... | ... |} |}40,000,000| |1924 | ... | ... | ... |} |} each year| |1925 | ... | ... | ... |} |}45,000,000| |1934 | ... | ... | ... |} |} each year| |1935 | ... | ... | ... | ... |}40,000,000| |1944 | ... | ... | ... | ... |} each year| |1945 | ... | ... | ... | ... |}30,000,000| |1954 | ... | ... | ... | ... |} each year| |1955 | ... | ... | ... | ... |}30,000,000| |1964 | ... | ... | ... | ... |} each year| |1965 | ... | ... | ... | ... |}15,000,000| |1974 | ... | ... | ... | ... |} each year| +-----+--------------+----------+------------+---------------+-----------+

These several estimates are of course to be looked upon merely as approximations, and they are, moreover, not framed on exactly the same bases. They, however, agree in the main that the 1899 output of roundly £20,000,000 will be increased to some point between £30,000,000 and £50,000,000 within a few years' time, and maintained thereat, more or less continuously, for periods varying over 45 and 65 years. The production of the several estimates for the whole period gives an average of £37,000,000, which is only slightly higher than that of Mr. Bleloch, which is £35,714,285. This, consequently, is the handsome yearly output which the Rand mining industry offers in the near future--an amount which alone equals the total production of the whole world in 1897--if the circumstances are at least equal to those which previously prevailed.

Having advanced the question of the future of the mining industry to the extent of showing a possible gold yield of at least 2,871 millions, spread over a period of seventy years at the rate of between 37 and 40 millions a year, at a moderate estimate, it is pertinent to inquire somewhat into the efficacy of the means for securing this return, the location of anything and its appropriation being two distinct matters. As implied previously, the realisation of this huge prospective gold yield depends upon the circumstances of the industry being at least equal to those of the past. If found to be superior, the ultimate realisation will only be made the more certain. These circumstances may be conveniently classified as external and internal. So far back as the Industrial Commission of 1897 it was recognised that the essentials for the development of the Rand were reduction of taxes and economy in working. The evidence of all the prominent heads of mining groups, both English and foreign, then tendered, in the sum amounted to this. Where the circumstances of a mine are such that they can only be worked at a higher cost than their returns, or with only an infinitesimal profit, either costs must be reduced or the mine compelled to close down. In many cases a reduction of working costs of so moderate an amount as 2s. per ton means the life of a mine, and less than this spells bankruptcy. Where mines had exhausted every effort to reduce working costs, it was also contended with justice that they had established a claim for moral and material assistance on the part of the Government, where it could be properly accorded; indeed, a personal interest, so to say, attached to Government interference, in that the national revenues were jeopardised when mines failed of successful working. The assistances asked for by the mining industry, and which the Government were able to accord, are now notorious, but are worth reciting for the bearing they have on our present subject. They were fiscal reforms conducing to cheapening of labour by reducing the cost of living both for whites and natives; increase in the effectiveness of native labour by the proper enforcement of the Liquor Law, the cancellation of the local spirit monopoly, and the withdrawal of the right of free imports of spirits from Mozambique and the Orange Free State; abolition of monopolies which tended to enhance the cost of materials used in the mines, including those of dynamite, cement, &c.; reduction of rail rates, and abrogation, by arrangement, of the transit dues levied by the coast Colonies, thus lessening first and working costs of mining equipments and materials; promotion of large public works directly or indirectly affecting the mines, such as provision of adequate water supplies, construction of railways, &c.; finally, an equitable and sympathetic attitude of the Governing Power to all and every question having relation to the country's staple industry. So far as these reforms were appraisable, they were reckoned to be equivalent to a saving of not less than 6s. per ton in working costs. What practical chance there was of gaining the relief sought under the old _régime_ is shown by the futile results of the Industrial Commission's labours.

But the altered circumstances of the mining industry since the war are evidenced by the reforms already consummated and under weigh, comprising among them some of the leading demands of 1897. This fact is conclusive that, so far as external circumstances are concerned, the mining industry is not only in the enjoyment of equally favourable circumstances with those existing previously, but even greatly superior. By so much, therefore, is the perspective of the gold yield to which we have made allusion assisted towards becoming a reality.

As regards the internal circumstances on which the progress of the mining industry depends, these are the employment of the most improved methods and means of production. They comprise the most perfected machinery and appliances, and the latest processes of metallurgical and chemical science. Speaking generally, it may be said that on the Rand at the present time are employed the most up-to-date skill and technical knowledge, and the latest devised mechanical appliances. This, by the way, is only true of individual mines however. The equipment of the mass varies greatly, and necessarily so, since the conditions of one mine differ vastly from those of its neighbour; and distant and even contiguous localities require unlike treatment, according to the nature of the ore or reef worked and other local conditions. The improvement effected hitherto is evidence, however, of the initiation and energy which have been displayed by the heads of the mining industry in the past, and an earnest for the future, while the progress achieved abides as an invaluable guide for all future mining operations in like geological formations.

The knowledge of how best to treat the peculiarities of the banket reef has, however, only been slowly gained, and at the cost of much money and many unavoidable blunders. For instance, the only metallurgical operation for the extraction of gold employed up to 1889 was the stamping mill, and fine gold and amalgam were necessarily abundant in the tailings which were cast away on the spoil heap. The cyanide process, and that of the treatment of slimes, were only applied in 1891 and 1898 respectively. Their use has added millions to the yearly output of gold. The amalgamation process, the chlorination treatment of concentrates, and the use of frue vanners are other innovations gradually introduced as results of experiment and experience, and which have likewise increased the efficacy of the extractive operations. Similar progress has been shown in the improvement effected in the mechanical equipment. At first the mining operations were confined to the primitive digging of a huge trench over the site of the outcrop, with the simplest delver's tools furnished by the locality. This method has advanced to the stage of sinking shafts to the enormous depth of a mile into the bowels of the earth, equipped with the most elaborate hoisting plant, with underground equipment lit and worked by electricity, and the complementary surface establishments, at a cost running into hundreds of thousands of pounds. There yet lies before the industry the general adoption, not only of these but of other improvements which experience has shown to be desirable, such as the practice of sorting of ore, the use of heavier batteries on the score of greater economy, &c., and their utilisation is merely a question of time. As, therefore, all these improvements and betterments have been successively made, and the mining industry is only now gradually--it is not yet, so far as a large number of them are concerned--entering into the full use of them, it is obvious that future mining operations must not only enjoy the same favouring circumstances as those which enabled the huge mining output of the past, but a very much better environment, through the more general use of all those methods which experience and science have shown to be advisable. As a consequence, and in the measure of the value of these improvements, will the effective output be ameliorated from now onwards.

The value of the improved circumstances of the mining industry alluded to is convertible into figures in the terms of working costs and divisible dividends. The former may be said to be the barometer of the latter. In the past, in the early days of the mining industry, when the problems of mine equipment and gold extraction and winning were only imperfectly understood, the wasteful expenditure of money on inefficient methods and appliances swallowed up in many cases every vestige of profit.

It was incidental to the first operations on the then unknown geological formation of the Rand, when the very science of the goldfields had to be created. Costs of working on the Rand are now, through the excellent system devised by the Chamber of Mines, tabulated so that the outlay of individual mines, or of the mining industry in the aggregate, may be seen at any moment at a glance. For instance, taking the record for the eight years from 1890 to 1898 inclusive, for example, the working costs ranged from 80.8 per cent. of the total value of the gold produced by eighty-five companies in 1890 down to 68.1 per cent. in 1898, the last full year before the war, the decrease showing the extent of the progress made in reducing the working costs. Simultaneously the dividends increased from 19.2 to 31.9 per cent., testifying to the close kinship with the costs factor. These figures are a general average taken over the aggregate of the mines working, and do not represent the ratios of working costs of individual mines, which differ of course according to the greater richness of the ore, the fewer difficulties to be dealt with in winning it, and the methods employed to secure the end in view. This is exemplified by the fact that in a few of the best equipped mines costs have been brought down to as low as 17s. 6d. per ton, while on others they rise to 79s. 6d. and above. The Robinson mine is a case where, despite adverse circumstances, the enlightened employment of the latest appliances of science and mechanics has resulted in reducing costs to an extremely low level. In 1888 the working costs of the mine were 72s. 1d. per ton; in 1892 they were reduced to 46s. 5d., and in 1896 to 30s. 11d. They have subsequently been reduced to a still lower figure, and this despite the fact that the ore changed from an oxidised character to a pyritic, involving greater difficulty and cost to treat. This mine was the first to introduce frue vanners, the cyanide process and the treatment of slimes, expending as much as £80,000 in the last innovation. By means of these it raised its gold extraction from 65 to 90 per cent., and gave encouragement and impetus to all mining on these fields. The latest costs published for the month of September this year of thirty-six mines in working give an average of 26s. 3d. per ton, which shows that operating charges are now at about the same ratio as they were before the war. Although so reduced, however, they are still relatively higher than they may be expected to be when the mines settle back into their normal grooves. The reason for this is that only a few mines are now working up to their full battery power, and, while costs are on the full scale, results are less, surface dumps are being drawn upon for mill service instead of the mine itself, owing to lack of full supply of labour, &c. When, however, the effects of the important fiscal reductions just made have had time to exercise their effect in reducing the cost of imported mining stores, foodstuffs, and the smaller machinery and metal goods charged by the mines to the working account, further reductions in the working costs will be possible. Of the actual money value of this per ton of ore milled, various opinions have been ventured. It has been estimated by experts that it is possible under favouring circumstances to reduce the expense of working by some 10s. per ton, at which rate ore yielding over 5.6 dwt. per ton bullion could be made to yield a profit. The importance of this not only in improving the present position of all mining undertakings, but in stimulating the low-grade mines to come into the working stage, can hardly be overestimated. With the various difficulties besetting the mining industry removed, the future working cost level should be lower than at any preceding period, taking into account the benefit of the recent fiscal reductions and other governmental assistance in prospect.

Allusion has been made to the probable continuation of the Rand formation beyond its present area; but, as a matter of fact, the Witwatersrand series of reefs, or an amplification of them, has been more or less proved for a distance of nearly one hundred miles to the north and south. The strike of the reefs is not uniformly continuous--in fact, the reefs are intersected by quite a numerous series of faults, and in many places they have been subjected to extensive denudation, to the extent of complete obliteration of the outcrop in places. Nevertheless at various points very remunerative mines have been established, and although, on the whole, the character of possessing a low-grade ore is attributed to these reefs, this is probably due more to the very incomplete prospecting to which the area has been subjected than to any actual lack contrasted with the better known central section of the Rand. On this subject Mr. Bleloch makes the apposite observation that "it is not reasonable to think that only the richest portions of the Witwatersrand zones have been laid open on the surface, and that the sections which remain covered are poor. It is probable that many portions of these hidden areas contain reefs, if not rich at least payable, and this may especially be hoped for in that region where the reefs are completely hidden, and at the two ends of which, where they are exposed, they are found to be payable."