ANGLOGOLD Ashanti's strategy to develop a new way to safely and profitably extract gold from SA's deep and dangerous mines is starting to take shape and could well herald a "renaissance" for the ailing sector.

AngloGold is championing new methods to mine gold from its mines, one of which, Mponeng, is the deepest in the world at more than 4km below the surface. It is becoming increasingly difficult for companies to justify the cost in human lives and money for operating mines kilometres below the surface and they are looking for new ways of operating.

"(On June 29) for the first time in 100 years we extracted a 30m section of reef using a horizontal raise drill. If that technology can be made more efficient we believe it will revolutionise deep-level mining in SA and potentially the mining industry," CEO Mark Cutifani said last week.

"We believe that is ultimately the answer, taking people out of dangerous areas, and new technologies are required. It's a long programme. It will probably take us another seven years to get there, but we will get there."

Michael MacFarlane, executive vice-president: business strategy at AngloGold, said some reefs had grades as high as 20g a ton, but because the reef was just 10cm or 15cm wide there was dilution as people needed space to work, which resulted in the grade delivered to the mill dropping to about 7g a ton. "Our reefs range from 10cm to 2m, but the lion's share is 50cm or less. When you put a person in to mine those, you get a lot of dilution," he said.

Apart from safety, another big issue was the amount of gold being left behind in pillars to keep deep-level underground mining areas safe, and these pillars are becoming bigger the deeper the mines are going. Currently, about 40% of gold reserves are left unmined in pillars and that figure will grow.

"We want to mine all the gold, only the gold, all the time," Mr MacFarlane said.

"If you look at the declining gold production in SA, you can see the commercial equation in SA breaking down. If we don't interrupt it, it's just going to continue. SA has some of the highest quality reserves in the world," he said.

"We believe the gold mining industry in SA could see a renaissance. That's being as optimistic as you can be but that's our view," he said. "There hasn't really been one step back yet in the work we've been doing."

A major German drilling company is building a prototype drilling machine to do the reef boring. It will be ready in a year.

This year and next, AngloGold will test its ideas and prototypes so that in 2014 it will pull all its different strategies on mine design, reef boring, transportation of ore, tunnel boring and backfill together and try them in a single mine. "We want to test the technical and commercial viability of it. We would start that in 2014 up to 2017," Mr Mac Farlane said.