Gold Fields's South Deep gold mine may have the solution to the industry's troubles as the company seeks a path to sustainable mining to overcome the factors that have sent the local industry into decline - but only if it manages to move beyond its technical setbacks. The mine, on the West Rand, has been operating at a loss and Gold Fields has spent R4-billion over eight years on mechanising South Deep. The mine has been in development for at least two years longer than planned.story_article_left1The South Deep project contributed 38700 ounces at a cost of $1986 (R40300) an ounce in the latest quarter.Gold Fields CEO Nick Holland said 70% of the company's reserve base was at South Deep. However, as a result of technically complex operations and systematic issues, the company's second-quarter results showed that it had to reduce its production target for South Deep to about 6500kg this year, leaving it at least 8.5% lower than expected ."We have structurally condemned South Deep's reserves to a lesser position. There is room for improvement," said Holland, who focused on the mechanised mine's potential for reducing risks by simplifying mining methods.Despite Gold Fields's downgraded outlook, industry economists agree mechanisation is the future of gold mining .Economist Iraj Abedian said the move towards mechanisation did not necessarily equal immediate profitability and mines were likely to remain unprofitable for a number of years. "A lot of our mines are old and their reserves are not likely to last decades, which makes the choice of mechanisation more difficult," he said.Ground-breaking technology introduced by AngloGold Ashanti in 2010 is one of the mechanisation developments that South African mines are looking at implementing once it has been successfully tested.The technology drills 5km beneath the earth's surface targeting the untapped parts of the ground with gold.story_article_right2The innovation does not replace conventional mining, but aims to get to the areas underground that mineworkers cannot reach, according to AngloGold Ashanti CEO Srinivasan Venkatakrishnan.Although the machine dilutes around 200% grade, it has successfully drilled 48 holes to date at its testing site."South Africa's gold industry is undoubtedly in a challenging position," Venkatakrishnan said. "But we should not lose sight of the fact that it still has great potential in the long term given the sheer size of its undeveloped gold resources that lie deep underground."Although mechanisation might be the much-needed solution to South Africa's gold mining problems, it poses a threat to employability, as human labour will be replaced by technology and add pressure to the South African economy.Holland said mechanisation would be a challenge for businesses, labour and the government but it was "going to happen with or without us; it's coming at us like an express train". The industry had to embrace technological advancements, as this would increase its competitiveness in the global market and reduce the threats of mine closures.Director-general at the Department of Mineral Resources Thibedi Ramontja agreed that modernisation was the next step in gold mining, but that the department was looking at ways to promote "employment sustainability across all sectors of the economy" to advance socioeconomic development.Gold Fields now expects South Deepto be fully operational by February 2017...