South Africa Gold Output Stagnates Despite Rising Prices And Decline In Exploration Investment

Source: Reuters.

But with no boom in new mine development expected, they're unlikely to add enough production any time soon to significantly lift the stubbornly low output of a country that for more than a century was the world's biggest gold producer.

South Africa's gold exploration has dropped nearly 90% from the 1990s, with spending on mineral exploration declining to just $43m in 2025 from $900m in 2006, according to Statistics South Africa.

Its gold production has plummeted to 90 metric tons annually from a 1970 peak of 1,000 tons on dwindling economically viable reserves, labour unrest, and the geologically taxing conditions in the world's deepest mines.

Gold prices meanwhile have surged, climbing about 60% in 2025 to a series of all-time highs on trade tensions, central-bank buying and expectations of US rate cuts. But rising prices are yet to entice South African miners to invest significantly in new output.

Gold producers favour shallower, or surface, projects

As prices climb, diversified miner Sibanye Stillwater is prioritising shallow, high-margin projects to boost its gold output. Its plans centre on Burnstone, a development project it says will be a low-cost, long-life operation.

It is also pursuing growth opportunities with its 50%-owned DRDGold, which recovers gold from waste dumps, chief executive officer Richard Stewart said on a 20 February results call.

Harmony Gold, South Africa's biggest gold producer, is looking to potentially recover 5.7 million ounces through waste retreatment, chief executive officer Beyers Nel told analysts on Wednesday, 11 March 2026.

Underground mining expansion remains unlikely for Harmony.

"Given the lead time it takes to develop into an area, you will possibly only start mining there in about two to three years' time," finance director Boipelo Lekubo said. "Who knows what the gold price will be then?"

New mine in iconic gold basin

West Wits Mining launched South Africa's first new underground mine in 15 years last October. The Qala Shallows mine taps into the Witwatersrand basin, reputed to have produced about half of all the gold ever mined in the world.

The mine is shallower than more established shafts and has access to existing infrastructure, cutting capital costs. It is also mechanised, reducing labour costs, and uses hydropower to extract ore, instead of the more expensive traditional compressed air.

"We actually got a very, very economical project, given the new gold prices," West Wits Mining chief executive officer Rudi Deysel noted during a tour of the mine.

The company plans an initial annual output of 70,000 ounces and envisions scaling to 200,000 ounces in future phases.

But in the short term, not much change is expected in South African output. Next year the Minerals Council of South Africa expects gold production to remain at around 90 metric tons - not far from levels at which it has bumped along for the last five years.