In October 2025 the Qala Shallows mine made history. That is when the first ore production began at the venture, situated 15 km to the west of Johannesburg. It was South Africa’s first new underground gold operation since 2009.

Run by Australian company West Wits, the mine will start production at an initial rate of 15 000 tons to 20 000 tons of ore a month from early 2026, with an increase to 65 000 tons a month within three years. Gold production is expected to be about 70 000 oz/y over 12 years. The development of the first new gold mine in 15 years is a representation of how the country’s gold mining industry has contracted from its former dominance of the 1970s and 80s especially, when it was by far the biggest gold producer globally. Now it’s ranked 12th by the World Gold Council, overtaken even by ‘minnows’ on the continent such as Ghana and Mali.

There are several reasons for the decline, from uncertain regulations to difficult labour relations combined with, as mining historian Duncan Money, quoted by MiningMx, describes it, ‘the enormous and expensive technical challenges’ of South African operations, which have some of the deepest mines in the world.

Qala Shallows will benefit from global gold prices that have risen nearly 50% this year.

‘Gold’s performance has been nothing short of remarkable,’ was the way a research brief by Laurium Capital in November put it. ‘Prices surged past US$4 000 per ounce, driven by a convergence of macroeconomic and geopolitical factors. South African gold producers have been key beneficiaries. Stock performance has been mixed, with operational challenges tempering enthusiasm, but strong prices have bolstered margins and cash flows. Companies with lower costs and solid balance sheets are particularly well positioned for continued gains. On balance, we expect many of these supportive drivers to persist into 2026.’

As Laurium Capital details, for South Africa, the implications are significant. ‘The mining sector remains a vital source of export earnings, fiscal revenue (corporate tax and royalty collections) and employment – and rising precious metals prices provide a welcome offset to structural domestic challenges.’

Apart from gold, South Africa holds significant reserves of many other minerals, such as PGMs (platinum group metals), manganese, vanadium, chromium and titanium, all of which are vital for ‘green’ applications, as Gwede Mantashe, the Minister of Mineral and Petroleum Resources, pointed out in his foreword to government’s 2025 Critical Minerals and Metals Strategy: ‘The 21st century is being shaped by the global shift towards green industrialisation, decarbonisation and digital transformation. At the heart of this shift lies a growing demand for critical minerals such as manganese, platinum group metals, vanadium, rare earth elements and lithium. South Africa and the rest of the continent are abundantly endowed with most of these. This endowment positions our country as a strategic global partner in building resilient value chains for technologies of the future such as aerospace components, defence application materials, electric vehicles, battery storage, renewable energy and green hydrogen, among others.’

The minister reiterated the importance of mining to South Africa, writing that ‘the future of our country is inextricably linked to how we develop and manage our mineral wealth. It underscores the importance of infrastructure development, skills enhancement, research and innovation, and international partnerships to ensure that our mineral wealth becomes a catalyst for long-term prosperity’.

Apart from mining, services such as finance and real estate drive the largest share of GDP, and manufacturing, agriculture and tourism are also significant sectors. Tourism has traditionally been one of South Africa’s biggest employers, particularly because it can create jobs quickly across skill levels.

Earlier this year, Statistics South Africa reported that international arrivals reached 8.92 million in 2024, marking a 5.1% increase over 2023. This growth helped the tourism sector contribute an estimated 8.8% to the country’s GDP and support approximately 1.68 million jobs. Yet, despite consistent recovery over the five years since Covid-19, the industry has not fully returned to its 2019 performance, when tourism accounted for 9.5% of GDP.

‘It is incredibly misleading for politicians to talk about a 5% increase year-on-year in tourism arrivals, which may look good on paper, but the reality is that our tourism industry is not growing at an acceptable rate. Based on our data, we are at approximately 80% of where we were in 2017, when we recorded 2 725 855 overseas arrivals. Our tourism arrivals declined in 2018 and 2019,’ according to David Frost, CEO of the South African Tourism Association, quoted in Business Day Empowerment magazine.

‘South Africa has the potential to achieve similar growth [to neighbouring countries] but it requires addressing the structural blockages in our visa system, improving vehicle licensing processes, developing language skills in the industry and implementing targeted marketing strategies for key source markets. With proper consultation and collaboration, there’s no reason why we cannot match or exceed the recovery rates seen elsewhere in Africa.’

In the May 2024 general elections, no single party won an outright majority, leading to the formation of a Government of National Unity in June last year under President Cyril Ramaphosa, with the aim of rebuilding the economy and creating more jobs.

‘Since the nation’s transition to democracy in the mid-1990s, notable social advances have been achieved,’ according to the World Bank. ‘However, the momentum of progress has waned in recent years. Between 2005 and 2010, poverty levels declined from 75.5% to 65.8%. This downward trend then reversed, with the poverty rate rising to 66.2% in 2015, and it’s estimated to have reached 68.1% in 2025.

‘At the same time, public frustration has intensified due to poor service delivery, frequent power outages, water shortages and deteriorating infrastructure. Persistently high rates of violent crime continue to impact communities, undermining both social cohesion and investor confidence.’

It said GDP grew at an average of 0.7% per year over the past decade, leaving real per capita income roughly at 2007 levels. ‘Unemployment reached 33.2% in Q2 2025, with youth (15–24 years) hit hardest at 62.2% and women disproportionately affected. More than two-thirds of South Africans live in poverty, with the poverty rate estimated at 68% in 2025. This socio-economic challenge is compounded by factors such as governance weaknesses, infrastructure bottlenecks, limited competition, skills shortages and electricity shortages. Collectively, these obstacles have constrained economic growth and exerted further pressure on an already fragile labour market.’

Following years of low growth and rising unemployment, the new government is accelerating moves to co-operate more with the private sector, especially with regard to infrastructure.

In mid-November, for example, the Minister of Finance, Enoch Godongwana, unveiled the 2025 Medium Term Budget Policy Statement, which, according to an opinion article by Hugh Hacking, executive head of structured investments and annuities at Momentum Corporate, ‘put a strong emphasis on accelerating private sector participation in financing and delivering infrastructure’.

‘Initiatives include new guidelines for public-private partnerships (PPPs), a credit guarantee vehicle (developed with the World Bank) to de-risk private investment and the establishment of partnership offices within key departments like Water and Sanitation and Transport. Efforts to improve the PPP framework aim to build investor trust by ensuring long-term contract stability while expanded PPPs are expected to improve logistics efficiencies and reduce reliance on roads,’ writes Hacking.

‘National Treasury’s fiscal strategy is explicitly anchored on four pillars: maintaining macroeconomic stability; implementing structural reforms (particularly in energy and logistics); building state capability; and supporting growth-enhancing infrastructure,’ he writes.

‘The combination of fiscal prudence, debt stabilisation and plans to maintain an inflation target of 3% provides a compelling narrative for credit-rating agencies, supporting a potential sovereign rating upgrade. Government announced its intention to shift from short-term expenditure to long-term investment, particularly targeting waste and cost-cutting to improve the fiscal position. This approach reflects a growing maturing in governance, balancing social spending with business-friendly policies.’

October was also a good month for South Africa’s financial sector – the country was removed from the Financial Action Task Force’s so-called ‘grey list’, imposed in February 2023.

The grey list, which is officially known as ‘Jurisdictions under Increased Monitoring’, identifies countries with ‘strategic deficiencies in their systems to counter money laundering, terrorist financing and proliferation financing’.

South Africa’s removal from the grey list follows a ‘concerted and proactive response by a broad range of role players to tackle deficiencies identified in the country’s 2019 mutual evaluation, and to address action items during the increased monitoring process’, according to a statement by the country’s Financial Intelligence Centre.

The lifting of the grey list is expected to ‘restore investor confidence, reduce friction in international transactions, attract foreign capital, and support regional financial integration’, according to Sameer Singh, a senior research and investment analyst at Glacier Financial Solutions.

‘Delisting reduces the international risk profile of South African transactions. It allows for easier international banking, lower transaction costs and better investor confidence, all important for economic growth and global business engagement,’ he says.

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