Faith Nyasuguta
South Africa, Africa’s richest nation in terms of mineral wealth, is preparing to open its first new underground gold mine in 15 years. This marks a rare moment for a country that once dominated global gold production but has since seen its industry fall into sharp decline.
The mine, known as Qala Shallows, is being developed by West Wits Mining Ltd. on the western edge of Johannesburg, the city born out of the historic 1880s Witwatersrand gold rush. With a $90 million investment, the project is expected to begin operations next year and stands as a much-needed boost for South Africa’s struggling mining sector.
According to feasibility studies, Qala Shallows is set to produce about 70,000 ounces of gold annually. While this may be modest compared to global heavyweights, it remains significant for South Africa, which has watched its once-thriving industry shrink dramatically. Over its projected 17-year lifespan, the mine is expected to generate $2.7 billion in revenue, with production costs kept below $1,300 per ounce – a figure that offers competitiveness in today’s market.
To finance construction, West Wits has secured around $50 million in loans from South Africa’s state-owned Industrial Development Corporation and Absa Group Ltd. Once extracted, the ore will be processed at a nearby plant owned by mining giant Sibanye Stillwater.
The Long Fall of a Gold Giant
South Africa was once the world’s largest gold producer, a position it held for most of the 20th century. However, output has slumped by more than 70% in the past two decades, as deep mines became increasingly expensive to operate. Rising labor costs, high electricity prices, and the challenges of working in mines that extend more than three kilometers underground have battered the industry.
In 2019, Ghana overtook South Africa as Africa’s leading gold producer, underlining just how far the former giant has fallen. Today, fewer than 90,000 people are employed in the country’s gold sector – less than a fifth of the workforce during the industry’s peak in the 1980s.
The decline has also been a blow to Johannesburg, the “City of Gold,” whose very existence is tied to the mining boom. The launch of Qala Shallows, though on a smaller scale compared to the massive operations of the past, is being welcomed as a sign of revival.
Shallower, but Symbolic
Qala Shallows will reach depths of up to 850 meters (2,788 feet) – relatively shallow by South African standards, where some mines go beyond 3 kilometers underground. This shallower design may help keep costs lower and reduce some of the risks associated with ultra-deep mining.
The last new underground mine in South Africa was Gold One Group’s Modder East, which started production in 2009. Another, Burnstone, briefly opened in 2010 before being acquired by Sibanye Stillwater.
For South Africa, Qala Shallows represents more than just another mine. It is a test of whether the country can breathe life back into an industry that built its economy, defined its cities, and once placed it at the very top of the global gold chain.
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