South Africa is set to launch its first new underground gold mine in more than a decade, marking a rare resurgence in a once-dominant industry now in steep decline.
Australia-listed West Wits Mining will commence operations at the Qala Shallows mine on the western edge of Johannesburg in 2026.
The $90 million project is the country’s first new underground gold venture since 2009 and is expected to produce approximately 70 000 ounces annually over its 17-year lifespan.
Record-breaking prices
The project enters production amid record-breaking gold prices, with bullion trading near $3 340 per ounce – a 27% increase in 2025 alone.
West Wits CEO Rudi Deysel said the surge in gold prices has strengthened the project’s viability.
“We are really the only formal company trying to start a new mine in South Africa’s gold industry,” said Deysel.
Mining will begin during the mine’s three-year construction phase, supported by a combined $50 million in financing from the Industrial Development Corporation and Absa Group.
The ore will be processed at an existing facility owned by Sibanye Stillwater, avoiding the need for a new plant.
Qala Shallows is located in a previously untapped section of the Witwatersrand Basin, where a historic gold rush sparked Johannesburg’s founding in the 1880s.
The site had last been active in 2000.
Output has declined
The new mine will operate at a maximum depth of 850 metres, far shallower than some of South Africa’s deepest mines, which reach depths of over 3 kilometres.
Its cost of production is estimated below $1 300 per ounce.
Once the world’s leading gold producer, South Africa’s output has declined by over 70% in the past two decades.
Challenges such as high operating costs, deep-level mining, labour demands, and electricity instability have plagued the sector.
Gold mining employment now stands at under 90 000 workers, a fraction of the peak seen in the 1980s.
Mining historian Duncan Money notes that while South Africa’s political and regulatory environment is often cited as the cause of the industry’s decline, global expansion driven by earlier gold booms played a greater role.
“The demise of South Africa’s gold industry is usually told as a morality tale about bad domestic politics, but the crucial development was the worldwide expansion stimulated by soaring gold prices in the 1970s and 1980s,” Money said.
Despite these challenges, Qala Shallows represents a bright spot, offering renewed employment and economic activity.
The project is expected to generate around $2.7 billion in revenue over its lifetime and could signal a modest revival in one of the country’s most storied industries.
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