When gold mining began in South Africa more than 120 years ago, it was said that it would not last longer than a century. Today, with the drop in gold prices, the strengthening dollar and decreased demand for the precious metal from China, it seems mining for the yellow metal is on its last legs.After a week of results released by three of the biggest gold producing companies in South Africa - AngloGold Ashanti, Harmony Gold and Gold Fields - it seems producers are battling not only with a falling price of ore but reeling from the local pressures on the industry.story_article_left1Rising electricity tariffs, maintenance stoppages , poorer ore bodies , labour disputes and stoppages due to fatalities and injuries have led to low productivity and high operating costs that offer a damning assessment of the future of gold production.AngloGold chief financial officer Christine Ramon said there had been a drop in capital investment compared with last year, attributing this to ongoing safety stoppages, which are part of the production cycle to ensuremining remains safe.Independent economist Ian Cruikshanks said AngloGold's second-quarter results implied that the biggest producer of the metal on the continent is not committing new capital because some of its mines were no longer profitable. "They simply are saying: 'Let's take out the gold we can get to and leave it at that'."It's not just the industry that suffers. Old mining communities are still recovering after the closure of former gold mines left businesses in these areas vulnerable. Schalk van der Merwe, the president of the Free State Goldfields Chamber of Business, said the number of businesses that had failed due to mine closures would be difficult to estimate, suggesting: "Eskom is killing more businesses than the mining industry ever could."The South Deep mine on Gauteng's West Rand, owned by Gold Fields, has been at the forefront of mechanised mining in South Africa. The ultra-deep mine, currently operating 3km below the earth's surface, has 70% of the company's reserve base.Gold Fields CEO Nick Holland, who in the eight years of owning the crown jewel in South Africa's gold sector has yet to meet production targets, told Business Times the move towards a more mechanised industry was the future.full_story_image_hleft1"We think the potential of driverless trucks underground is two to three years away," he said, implying that the mechanisation of mines would be a reality 10 years from now.With mechanisation seemingly the only future for local gold mining, there are likely to be even fewer jobs and restrictions on existing ones.According to data provided by the Chamber of Mines, in the past decade one in three jobs in the industry have been lost, with employment falling from 180000 jobs in 2004 to around 119000 people last year.Holland said mechanisation was unlikely to be halted despite the impact it would have on employment.Stagnation in the gold-mining industry has accompanied rising wage levels. Negotiations over a three-year wage deal are currently in a stalemate, with companies withdrawing their final offer this week.National Union of Mineworkers spokesperson Livhuwani Mammburu said that in order to stabilise the mining industry, mining bosses would have to pay a living wage to their mineworkers."If you can't pay workers a living wage there's always going to be instability in the mining industry."However, Elize Strydom, the chief negotiator for the Chamber of Mines that represents gold companies, is adamant that a strike would cause major damage in an already suffering industry and doesn't see it going that far.story_article_right2"Talks of an impending strike are premature ... While companies, employees and other stakeholders lose during strike action, ultimately it is employees and their communities that bear the brunt," said Strydom.Stats SA data on gross domestic product (GDP) in the first quarter of this year show that the mining sector contributed 8% and grew by 10.2%.Gold remains the fourth-largest contributor to GDP in mining, which is led by platinum, coal and iron, making up 16% of the overall contribution.Local gold mines produced 169 tons of bullion worth R66-billion last year, according to data from the Chamber of Mines. That's down by 83% from a peak of 1000 tons in 1970.Thibedi Ramontja, the director-general at the Department of Mineral Resources, said despite the decline in the gold price, the future of gold was "highly attractive in the long term".He stressed that South African mines needed to focus more on technological development and the modernisation of the industry.Despite this, the future of gold mining in South Africa remains uncertain and if it has any chance of survival it will have to claw its way out of the deep hole it has created for itself.South African gold miners are now trading at levels seen around the start of the millennium, with the JSE's gold-mining index trading 73% off the peak it reached in 2002...