Gold Price Surge Sparks New Wave of Mining Investment in South Africa

South Africa’s gold mining sector is experiencing a fresh wave of optimism, thanks to buoyant global gold prices that have injected new energy into long-term capital plans. According to Riaan Davel, Chief Financial Officer of DRDGOLD, the current pricing environment is giving mining companies the confidence to press forward with billion-rand investment programmes — and the country should make the most of it while it lasts.

Speaking at DRDGOLD’s 130th anniversary celebration on the Johannesburg Stock Exchange (JSE), Davel expressed strong belief that South Africa is well-positioned to benefit from the gold price momentum — not only to extend the life of existing mines, but to also spark innovation, sustainability, and broader economic growth.

“It’s giving us much more confidence to execute our capital programme,” Davel told Mining Weekly. “Over the next couple of years, we’ll be building a massive tailings storage facility on the Far West Rand and expanding our Ergo operation on the East Rand.”

DRDGOLD, now boasting a market capitalisation of R27 billion, is already in the middle of a R10-billion capital spend plan. It recently completed a R3-billion solar power project on the East Rand aimed at reducing operating costs and ensuring a longer mine life.

A Gold Price Rally Creating Real Momentum

The World Gold Council’s latest report shows gold demand surged by 170% in the first quarter of 2025, reaching 552 tonnes. Total gold demand hit 1,206 tonnes. A recent Reuters poll of 29 analysts and traders forecasted an average gold price of $3,065/oz for 2025 — with bullish projections ranging up to $5,000/oz by 2028.

This golden era is sparking renewed interest in brownfield projects and on-surface tailings recovery, many of which now make solid economic sense. The elevated price is also enabling miners to fund exploration drilling and environmentally sustainable practices — without sacrificing profitability.

A National Opportunity, If Seized

Davel believes the public and private sectors need to align quickly to take advantage of the favorable market. “We want to create jobs. We want to better communities’ lives. That should fit directly into government objectives,” he said.

The DRDGOLD model, which prioritizes early-stage environmental restoration and long-term sustainability, is being heralded as globally replicable. Game has returned to once-devastated land on the East Rand, and natural vegetation now flourishes where tailings used to lie.

“We’ve shown that we can take legacy mining infrastructure and transform it. Start restoration on day one. That’s the model,” said Davel.

Long-Term Vision Amid a Golden Opportunity

With elevated gold prices expected to continue in the medium term — and perhaps even beyond — South African mining firms are moving quickly to capture value. DRDGOLD’s vision of mining all viable gold-bearing material on both the East and West Rand has taken on new urgency.

For South Africa, the gold rally isn’t just a boost for miners — it’s a rare chance to grow jobs, restore land, and drive collaboration between business and government. Whether this momentum is sustained will depend on how effectively these sectors work together.

The gold is there. The confidence is back. Now it’s about execution.

{Source: Mining Weekly}

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