From gold prices to chinchillas: five key trends impacting South Africa's mining landscape in 2025

2 Jan 2025

South Africa’s mining sector has been on a rollercoaster ride the past few years, but there has been a renewed sense of optimism since the formation of the Government of National Unity, which is seen as the last great hope for urgent structural reforms.

What lies ahead for the South African mining sector? Here are five key factors to look out for in 2025. One is in Chile, but it involves a JSE-listed gold producer, and it’s a fun one to watch because it improbably involves furry little animals.

1. Prices

Gold prices have scaled record highs this year, driven by the precious metal’s safe-haven status in a time of uncertainty and frothy geopolitical tensions. Emerging-market central banks have also been piling in. Gold could obtain new peaks in 2025 and that will flow to the bottom line of the likes of Harmony Gold.

Read more: Business Maverick’s 2024 stock picks returned 20% – and now for our 2025 stock picks

But platinum group metals prices have been depressed while coal has languished, and the wall of US tariffs that US president-elect Donald Trump has pledged to erect in his second term could be a major setback to the global economic recovery – bad news for most commodities. Gold could remain the glittering exception.

2. Logistics

If South African mining companies cannot move their product by rail and port, they will sink. The sector has lost tens of billions of rands a year in lost export revenue because of Transnet’s woes, and miners have been turning to alternatives such as Maputo’s world-class port. The government and private sector are working together to resolve the bottlenecks. Transnet CEO Portia Derby has promised “to stop the bleeding”. It will take more than a Band-Aid to do so.

Read more: Transnet’s troubling trajectory: declining performance and debt risks threaten South African logistics sector

3. Zama zamas and crime

Operation Vala Umgodi seeks to disrupt illegal mining, and has stirred controversy with its “Surrender or Starve” strategy. This has seen police cut off supplies of food and water to the “zamas”, who spend weeks or months underground extracting gold from both disused and operating shafts. The government estimates the costs of illegal mining to the South African mining industry and the wider economy to be about R70-billion a year, and it plugs into transnational organised crime syndicates. Companies such as Sibanye-Stillwater have reported a surge in attacks on their operations as the red-hot gold price has acted as a red rag to zamas. Industry watchers will keenly monitor the progress of Operation Vala Umgodi in 2025, but addressing the scourge will require a lot more than military-style tactics. The zamas are a legacy of the migrant labour system which once sent over 500,000 exploitable foreign workers annually through the industrial meat grinder of South Africa’s mining sector. This tsunami of migrant labour has been reduced to a trickle, which explains why most of the illegal miners hail from Lesotho and Mozambique. Without meaningful economic development and job creation in those countries, the ranks of the zamas will continue to swell.

Read more: Crisis committee claims police are deliberately misleading the public on Stilfontein’s illegal miners

4. Mining cadastre

After years of needless delays and false starts, the Department of Mineral and Petroleum Resources says a mining cadastre is finally on its way and should launch in June 2025. Canada’s highly rated Pacific GeoTech Systems will be the service provider. The mining sector waits with bated breath. A functional mining cadastral system is an online portal that displays a country’s mineral and other forms of natural wealth in a way that is accessible to the public. It serves the dual function of transparently showing the state of play of mining activities while allowing companies armed with this knowledge to apply for various kinds of exploration or mining rights. The lack of one is seen as a key reason for massive backlogs over the years in applications for mining and exploration rights and permits – all withering testimony to the administrative dysfunction which has been a hallmark of Mines Minister and ANC heavyweight Gwede Mantashe. South Africa’s share of global exploration expenditure has fallen to below 1% from 5% two decades ago – representing tens of billions of rands in lost investment – underscoring the importance of getting this right.

5. Gold Fields’ chinchillas

JSE-listed Gold Fields has a rodent problem, but it has to treat the critters more like royalty than rats. Gold Fields’ environmental permitting for its Salares Norte gold mine high up in the Chilean Andes hinged on it devising a plan to relocate about two dozen highly endangered chinchillas in the vicinity of the project. That seemed simple enough, but the rabbit-sized rascals have turned out to be an elephant-sized headache. “Operation Chinchilla” was launched in 2020, but the regulator halted it after two of the first four animals captured for relocation died. The project was given the green light to proceed again in 2023, but one phase – focused on the removal of a rockery that Gold Fields had declared chinchilla free – was halted in 2024 by the regulator in response to Daily Maverick’s reporting. Gold Fields now has almost 80 staff working on the issue, which is 40 employees for every chinchilla moved to date.

Read more: Loaded for Bear: Gold Fields now has almost 80 staff overseeing its chinchilla relocation project

Construction of the mine, which poured its first gold in March 2024, has been allowed to proceed. But plans for waste disposal and expansion could hit a rock if the remaining rodents are not moved in the next year or two. This is all material for Gold Fields and its shareholders. Its share price tanked 6% one day in 2024 when the regulator halted the dismantling of the targeted rockery. DM

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Business Maverick

1. Prices

2. Logistics

3. Zama zamas and crime

4. Mining cadastre

5. Gold Fields’ chinchillas