South Africa is preparing to open its first new underground gold mine in 15 years, a rare development in a country that once led the world in gold production.
South Africa is preparing to open its first new underground gold mine in 15 years, a rare development in a country that once led the world in gold production.
West Wits Mining Ltd. plans to begin output next year at its Qala Shallows project, located on the western edge of Johannesburg, the city built on the back of the 1880s Witwatersrand gold rush, according to a report by Bloomberg.
The $90 million project is projected to produce about 70,000 ounces of gold annually, modest by global standards, but a rare boost for South Africa’s struggling industry.
Qala Shallows, part of a concession that operated for more than a century before closing in 2000, is expected to generate $2.7 billion in revenue over its 17-year lifespan, with production costs kept below $1,300 per ounce, a feasibility study shows.
West Wits has secured roughly $50 million in loans from the state-owned Industrial Development Corp. and Absa Group Ltd. to help fund construction, while ore will be processed at a nearby Sibanye-owned plant.
Gold output decline
Once the world’s top producer, South Africa’s gold output has slumped by more than 70% over the past two decades, as its deep, high-cost mines struggle to compete globally. In 2019, Ghana overtook it as Africa’s leading gold producer.
Today, South Africa’s gold sector employs fewer than 90,000 people, representing less than a fifth of the workforce that existed during the 1980s. Rising wages, soaring electricity costs, and the difficulties of operating the world’s deepest mines have intensified the decline.
Qala Shallows will reach a maximum depth of 850 meters (2,788 feet), which is shallow compared to some South African mines that drill more than 3 kilometres (1.9 miles) underground.
The country’s last new underground operations were Gold One Group Ltd.’s Modder East, which began producing in 2009, and Burnstone, which briefly opened in 2010 before being acquired by Sibanye Stillwater Ltd.
Source: Business Insider
