On this piece of property on the outskirts of the city, hundreds of illegal miners known locally as “zama zamas” used hammers and chisels in hand-dug tunnels to search for gold for years.
South Africa’s First New Underground Gold Mine in 15 Years
As part of a global push to increase production of a commodity that is trading at record levels, the site has now been converted into South Africa’s first new underground gold mine in almost 15 years.
Rudi Deysel, CEO of West Wits Mining, the Australian firm that controls the mine, described it as “looking like a Mad Max movie.” “To go inside, I had to crawl on my stomach.”
💰 Record Gold Prices Drive New Mining Projects
- Gold Price: Futures crossed $5,000 per ounce
- Investment: $100 million poured into Qala Shallows
- Industry Impact: Old mines revived, new mines launched
- Global Trend: Mining budgets rising worldwide
- Confidence: High prices attract long-term capital
From Illegal Tunnels to Modern Mining
The mine is receiving about $100 million in investment, and its employees now utilize sophisticated drills and other equipment, wear hard hats, and carry emergency breathing gear. The project, known as Qala Shallows, is expected to yield more than $4.5 billion worth of gold at current market rates. It recovered its first gold in October.
Due to a number of variables, including increased geopolitical concerns, gold futures settled above $5,000 for the first time on Monday. In less than two years, the value of the precious metal has more than doubled.
Global Gold Rush Fuels Expansion
Mining businesses all across the world have seen an increase in revenues as a result of the rise, which has encouraged them to create new projects, expand their operations, and restart old mines. According to S&P Global Energy, global budgets for gold exploration rose 11% to $6.15 billion in 2025.
In October, Newmont, the largest gold miner in the world, began commercial production at its Ahafo North mine in Ghana. The second-largest gold producer, Barrick Mining, plans to begin underground construction of its Fourmile project in Nevada this year.
South Africa’s Declining Gold Legacy
The gold rush in South Africa is reviving a struggling industry. For a large portion of the 20th century, the nation was the world’s gold capital, producing almost half of all gold jewelry and bullion. However, because to its inability to draw in investment, South Africa has fallen from its longstanding position as the world’s top producer of gold to No. 12 since 2007.
The old, deep mines in South Africa are seen by investors as hazardous, costly, and labor-intensive. The cost of mining an ounce of gold in the nation is among the highest in the world due to unmechanized operations and skyrocketing costs, which are mostly the result of powerful unions.
⛏️ Why Qala Shallows Stands Out
- Depth: Much shallower than traditional SA mines
- Technology: Hydro drills and modern safety gear
- Costs: Lower break-even than deep underground mines
- Location: Just 10 miles from Johannesburg
- Efficiency: Faster production and safer operations
Investor Reluctance and Turning Point
Around 2021, West Wits started looking for funds for Qala Shallows, but they had trouble. According to Deysel, “investors did not even want to speak to us.” “They simply dislike South Africa.”
When gold prices started to rise, that changed, he claimed. A local bank, a development finance organization, and an American mining finance company, among others, provided funds for the project.
Modern Technology and Lower Costs
Compared to previous South African developments, the new mine offers advantages because it is only ten miles from Johannesburg’s city. As implied by its name, Qala Shallows has a proposed depth of about 2,800 feet and currently reaches about 200 feet. That is a fraction of the depth of the deepest mine in the nation.
Additionally, the project makes use of contemporary technology. Using hydro drills with long, narrow nozzles that blast out pressured water to liberate the ore, two-man teams of mud-splattered workers with headlamps bore into the rock in the dark mine. The mine’s break-even threshold of $1,291 per ounce is less than that of many large mines in South Africa, which usually operate under more difficult conditions and further underground.
Industry-Wide Expansion Pressures
Although production from Qala Shallows will not revolutionize the South African gold market on its own, it is encouraging that record prices are reviving a stale industry.
In an effort to more than quadruple its anticipated lifespan to 20 years, Harmony Gold, the nation’s leading gold producer, is deepening its Mponeng mine, the deepest in the world. The second-largest producer, Sibanye-Stillwater, is thinking of reviving its Burnstone mine.
Labor, Equipment, and Time Challenges
There are difficulties because of the industry-wide rush to increase capacity. According to Deysel, a geophysicist and mining engineer who has previously worked at several mines in Africa, it is more difficult to get skilled staff and there is currently a long wait list for equipment. In order to profit from soaring prices, West Wits, which also owns a gold and copper project in its home market of Australia, rushed Qala Shallows into production a year ahead of schedule.
“This was all done with a view to create a very quick cash flow,” Deysel remarked as he surveyed the shipping containers above the mine entrance that were used as offices, changing rooms, and a lamp room where employees put on headlamps before going down. It was suggested that the zama zamas who had previously extracted gold from Qala Shallows relocate to other local locations outside of West Wits’ license area.
Production Outlook and Employment Growth
By the end of the year, Qala Shallows’ payroll is anticipated to have more than doubled to 400 miners. In 2026, the mine is expected to extract over 6,000 ounces of gold; by 2029, that amount is expected to increase to about 70,000 ounces annually. Its estimated lifespan is 17 years.
According to Izak Odendaal, an investment strategist at fund manager Old Mutual, “the South African gold mining sector has really endured headwind after headwind over the years.” “It is amazing to finally receive this kind of boost from the price of gold.”
Frequently asked questions
1. Why has gold mining suddenly become so popular around the world?
Due to economic instability and geopolitical concerns, gold prices have reached all-time highs (over $5,000 per ounce). This has encouraged new investments and expansions by turning formerly unprofitable mines back into lucrative ventures.
2. Why is the Qala Shallows mine important to South Africa?
As the first new underground gold mine in South Africa in more than 15 years, Qala Shallows represents a resurgence of investor confidence in a long-declining industry.
3. Why did investors steer clear of South African gold mines in the past?
Due to their deep and hazardous mines, huge labor expenses from powerful unions, antiquated technology, and regular operational difficulties, investors saw them as risky.
4. What distinguishes Qala Shallows from more traditional South African mines?
Compared to conventional deep mines, it is far shallower, employs contemporary drilling technology, has lower break-even costs, and is safer and more effective.
5. Will this gold rush address South Africa’s mining issues?
Not totally. Even if it creates new jobs and capital, there are still issues including a lack of experienced workers, equipment delays, and high operating expenses.
Conclusion
The opening of the Qala Shallows mine close to Johannesburg is an example of how the rising price of gold has revitalized South Africa’s faltering gold mining industry.
The project demonstrates how record prices may revitalize investor interest, modernize operations, and create jobs, even though it is not a game-changer on its own. The current gold boom presents the industry with its best chance for resurrection in years, despite persistent structural issues.
Disclaimer:
This content is for informational and educational purposes only. It does not constitute financial, investment, or legal advice. Readers should conduct their own research or consult professionals before making any decisions based on this information.
