China looks set to overtake South Africa as the largest producer of Gold in the world according to a precious metal consultancy GFMS. The UK based consultancy based its forecast on the continual falls in South African production which has seen a 7.5% year on year decline with production levels now at an 84 year low.

In contrast China has with seven years established itself as the world’s second largest producer with strong continued growth which has seen it overtake the USA and Australia.

South Africa’s production in the first six months of the year was 134 tons only narrowly beating China’s 129 tons, but China traditionally has a strong production lift in the second half of the year, and if this repeats itself it may surpass South Africa’s gold production.

Analysts believe South African competitiveness has been eroded by spiralling labour costs and the rising value of the Rand.