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Illegal gold mining in South Africa brings hope

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Another half-dozen such operations are nearby. Closer to Main Reef Road, women break up rocks and grind them between stones and concrete to reduce them to powder to be later panned for gold. The activity takes place in many other parts of South Africa, mostly around mines that were shuttered because of lack of productivity, and is fueled by rising gold prices that these days stand at around $1,700 per ounce.

"There are 6,000 abandoned mines in the country and I think the majority of them still have ore that would be economical (to extract) at today's prices," said Peter Major, a mining expert at Cadiz, a financial services group. "The problem is getting the capital to reopen them."

The illegal mining provides a chance at income for unemployed South Africans and immigrants. But in the long term the activity will make it harder to attract a legitimate mining company to an abandoned site because some of the more easily accessible minerals will have been removed by the illegal operations, Major said.

Gold was discovered here in 1886 and it helped fuel the creation and growth of Johannesburg, known in the Zulu language as Egoli, meaning "the place of gold." South Africa produced nearly 70 percent of the world's gold in the 1970s. Production has been falling and South Africa is currently the world's No. 5 producer, according to the government. With strikes having affected not just platinum mines but gold mines too, gold companies are trying to keep their footing.

Major said 500,000 people were working in gold mines in 1990, with the official number now 150,000. Some of those who lost their jobs are certainly doing illegal gold mining, he said.

Buyers often come to the ad hoc operations to weigh and purchase gold. Miners say they also sometimes sell gold within their squatter camps. Mthembu said he melts all his gold particles together and sells it at the end of the week.

Zingaphi Jakuja, spokeswoman for the South African Department of Mineral Resources, said the ministry is collaborating with law enforcement agencies to combat illegal mining "as the activities are generally fuelled by complex criminal activities."

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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