"6.5 Trillion Won Gold Vein Discovered" Sparks Rush... $100 Million Bets Poured into Gold Mine

South African Gold Mining Industry Revived by Gold Price Rally
Estimated Gold Production Worth 6.5 Trillion Won

As international gold prices surpassed $5,100 per ounce (7.35 million won), reaching an all-time high, South Africa's previously stagnant gold mining industry is experiencing a resurgence.

AI-extracted image of gold bars placed underground.

On January 26 (local time), The Wall Street Journal (WSJ) reported, "A site on the outskirts of Johannesburg, South Africa, which for years was frequented by illegal miners, has been reborn as a new underground gold mine after 15 years," adding, "Record-high gold prices are sparking a global race to expand gold production."

According to the report, this area was previously known for hundreds of illegal miners called 'zama zama,' who extracted gold by hand from tunnels dug with hammers and chisels. It has now been transformed into the 'Qala Shallows' gold mine, operated by the Australian mining company West Wits Mining.

Approximately $100 million (about 144.4 billion won) has been invested in this mine. Workers wear safety helmets and emergency breathing apparatuses and use advanced drilling equipment. The mine began its first gold recovery in October last year, and it is currently estimated that, based on current market prices, it could produce over $4.5 billion (about 6.4976 trillion won) worth of gold.

Gold Price Surge... Increased Profitability for Gold Mines

Recently, mining companies around the world have been restarting idle or closed mines, expanding existing operations, and launching new projects. The rise in gold prices has boosted profitability and stimulated investment sentiment across the industry. According to S&P Global Energy, the global gold exploration budget for 2025 reached $61.5 billion (about 89 trillion won), an 11% increase from the previous year.

Newmont, the world's largest gold producer, brought its Ahafo North mine in Ghana to commercial production in October last year. The second-largest producer, Barrick Mining, plans to begin underground development of the Fourmile project in Nevada, USA, this year.

South African Gold Mines Regain Attention... "Breathing New Life into Traditional Industry"

In South Africa, the rise in gold prices is revitalizing a stagnant industry. For most of the 20th century, South Africa was the world's leading gold producer, supplying nearly half of all gold bars and jewelry ever produced in human history. However, due to a lack of investment, its production ranking fell to 12th place after 2007.

Investors have long viewed South Africa's aging and deep underground mines as risky and costly ventures. Wages for workers have risen significantly due to union influence, and the low level of mechanization has made mining costs among the highest in the world.

However, as gold prices have begun to rise sharply, the situation has changed. Qala Shallows has succeeded in securing funding from local banks, development finance institutions, and American mining finance companies.

Additionally, this mine is located only about 16 kilometers from downtown Johannesburg and has a relatively shallow structure as an advantage. The current mining depth is about 60 meters, with a final target depth of about 850 meters, which is only a quarter of South Africa's deepest mines.

Inside the mine, workers operate in teams of two, using hydraulic drills that spray high-pressure water to bore through rock. The break-even point is $1,291 per ounce (1.86 million won), lower than that of large mines operating in deeper and harsher environments.

The mine currently employs about 200 people, with plans to increase the workforce to 400 by the end of the year.

WSJ noted, "While the output from Qala Shallows alone may not be enough to change the industry's landscape, record gold prices are breathing new life into traditional industries, which is a positive sign."