LURE OF GOLD

Evening Star, Issue 21391, 20 April 1933, Page 11

LURE OF GOLD

MINING IN AFRICA '• KAFFIR " BOOMS—PARALLEL OF 1895 Despite the fact that a large number of countries have forsaken the gold standard gold is still looked upon by the world as a very precious metal, and its possession in sufficient quantities is still sought keenly by the majority of mankind (writes Hubert A. Meredith, in the ‘ Daily Mail ’)• When we speak of gold mines our thoughts automatically turn to South Africa, not as if it were the, only gold mining field in the world, but because for so long it has proved the richest. Recently we have been reading much about these South African mines and their shares, which are known in the London Stock Exchange as “ Kaffirs,” and which are now enjoying boom-like activity. Although it was nearly 500 years ago —actually in 1445—that the Portuguese first brought gold dust from South Africa to Europe, it was not until 1864 that Carl Mauch, a German mineralogist, discovered the goldfields of Tati, hi Zambesia. As the result of the stories spread by Mauch Australian diggers hurried to South Africa.

FIRST COMPANY.

In 1868 the first South African gold mining company was floated in London. It was called the Limpopo Mining Company. It was in this year also that the first diamonds were discovered in South Africa on the banks of the Vaal River , and on tho veld adjoining Colesburg Kopje. Diamond washing was deemed easier and likely to prove more lucrative than gold mining. So the mining fraternity abandoned their efforts to find South Africa’s deposits of the precious metal and turned their attention to its precious stones. . •

Gold prospecting continued, however, in a mild and half-hearted manner. The first really successful gold mining field was near Lydenburg, in the Transvaal, which was opened in 1873. In 1886 gold mining again sprang into prominence as a result of the rich discoveries which had been made around Barberton (a town which owed its name to two brothers called Barber, who took up claims which formed the centre of the mining settlement). It was here that the Sheba Reef Mining Company was formed, with a capital of £15,000. Within a year the market had revalued it at £1.500,000, A NEW GOLD RUSH,

This led to a fresh gold rush, diggers flocking in. from all parts of the world. The results, however, were disappointing. The locality was unhealthy, transport facilities were non-existent, and the cost of living tremendous. Many bogus companies were formed, and the field acquired a bad name which, one must admit, was well deserved. It was the Struben brothers to whom" we owe the Rand.

In 1884 they had discovered that the Banket Reef was auriferous, and in 1885 they erected a five-stamp battery and started crushing. In that year the total output of gold from South Africa was 1,4140 z, valued at £6,010. Last year this output had increased to 11,553,5640 z, valued at £48,619,128. But to revert to the ’eighties, when the Strubens sent samples of their gold-bearing conglomerate to Kimberley to be analysed; they were seen by a shrewd young fellow who was duly impressed. Ho journeyed to the district and was so successful in his prospecting that eventually he purchased the Lauglaate Farm at a cost of £20,000, which he subsequently floated as a public company for £450,000, thus laying the foundation of his subsequent great fortune. His name was J. B. Robinson.

On one of these farms Johannesburg was founded. Its history has, indeed, been a romance. The reef runs for sixty miles in its environment, and what before 1886 had been unsaleable Rand farms subsequently became greatly sought after, the poor men who owned them becoming immensely rich.

It was in 1889 that Barney Barnato turned his attention to the gold fields. He had migrated to South Africa from Whitechapel in 1873, and had made a considerable fortune 'in the diamond fields at Kimberley before moving on to Johannesburg,

Once more, however, South African gold mining encountered difficult days. Working costs were high, mines proved disappointing, and much money was’ lost by those who speculated in “ Kaffirs ” on the London Stock Exchange. The position, however, was revolutionised by the discovery in the early ’nineties of the cyanide process of treating the ore. This process greatly increased the percentage of extraction, and so made the mining field much more valuable. THE 1895 BOOM. By 1894 South African shares became popular, and in 1895 came the great “ Kaffir ” boom. It is interesting to note—maybe it is significant, as history has a knack of repeating itself—that before the “Kaffir” boom the world had passed through a period of serious financial depression. The Baring crisis of 1890 had precipitated the termination of an era of gambling comparable in some ways to the disastrous boom of 1928. Five years elapsed, and then came the “Kaffir” boom, followed by perhaps some years of the greatest prosperity England has ever known.

During tlie boom the growth of the capital value of the Band companies was rapid. In 1893 it was less than £18,000,000; by 1894 it had increased to £55,000,000; while in 1895. it was estimated to have exceeded £300,000,000.

But the 1895 boom ended, as all booms do, in a slump. We now find ourselves thirty-eight years after the great 1895 boom and read of another “Kaffir ” boom. This time the movement is not based on any scientific discovery, but. merely on the fact that by abandoning the gold standard every ounce of gold produced in South Africa is now worth 120 s, against 84s lOd as recently as last December. This has had a sensational effect on the companies’ revenues for the month of January. Compared with December, an increase of more than £1,500,000 is shown. How much of this will be retained by' the mining companies and how much swallowed up by extra costs and taxation is not known. But there can be little doubt that, while the premium lasts, many companies must benefit to an amazing extent.