South Africa opens rare new gold mine after record price rally

South Africa’s first new underground gold mine in 15 years opened on Thursday, aiming to capitalize on bullion’s record-breaking rally.

West Wits Mining Ltd. held a ceremony at the firm’s Qala Shallows project on the edge of Johannesburg. The Australia-listed company brought its first ore to surface in October and is building a 30,000-ton stockpile.

While the $90 million mine will ramp up toward a modest annual output of 70,000 ounces, it’s still a bright spot for the nation’s gold sector. After topping the global rankings for decades, South African gold production has slumped by more than 70% over the past 20 years as its deep, high-cost mines struggle to compete with other producing countries.

The project demonstrates that South Africa “can still build safe, modern underground operations that generate long-term value for the economy and local communities,” West Wits said in a statement.

The company’s long-term ambitions are to tap other parts of its concession and grow output to 200,000 ounces a year.

Qala Shallows enters operations as gold has gained almost 60% this year, notching multiple all-time highs in the process.

(By William Clowes)