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This week, gold and platinum mining company Sibanye-Stillwater announced plans to re-open a medium-size gold mine near Balfour, 75km south-east of Johannesburg. The company’s Burnstone mine is the second significant South African underground gold operation to get off the ground in the last year, after the Qala Shallows operation, owned by West Wits Mining, came on stream in late 2025. But Burnstone’s project economics may be threatened by new black economic empowerment (BEE) ownership conditions, which may kick in when its current mining license expires in 2028.

The two operations have been rendered viable by the soaring gold price, which reached record nominal levels in January before steadying at a price of over $4 000 per ounce (oz) in the second half of the year. Neither mine plumbs the 3 500 metre-plus depths where the vast untapped reserves of the Witwatersrand Basin are known to lie. Qala Shallows ranges from 35 metres to 850 metres while Burnstone will start at an average of 550 metres with plans to go down to about 1km.

South Africa is estimated to have untapped gold reserves of 161 million ounces – about 5 000 tonnes – according to the United States Geological Survey. This might not seem huge compared not the 1 000 tonnes mined in the industry’s peak year (1970) but the quantum has been adversely impacted by South Africa’s dismal exploration spending in recent years. The country, which once dominated the African continent’s exploration spend (at 35% in 2004), has dropped to 5% and a ranking of 7th on the continent.

Burnstone is a completed mine, which Sibanye-Stillwater acquired from Wits Gold in 2024. The operation, developed by Toronto-listed Great Basin Gold, was opened in 2011 but shuttered less than a year later after underground flooding and other problems. Sibanye-Stillwater has kept it on care-and-maintenance in recent years and has spent R6 billion on the reopening. The company expects the mine to produce 130 000oz/year and keep running until 2055.

Qala Shallows, situated just west of Soweto, expects to produce 70 000oz/year at peak and to continue for 17 years. Although the opening of the mine was heralded as a major historic breakthrough at the time, it makes extensive use of existing surface infrastructure, including Sibanye-Stillwater’s nearby Ezulwini Processing Plant. For reference, South Africa’s most productive mine, Harmony Gold’s Mponeng, produced 333 000oz in 2025.

Neither recent initiative reflects improvements to South Africa’s enabling environment, which remains in the bottom quintile of the Fraser Institute’s mining investment attractiveness index. In fact, Burnstone has been restarted in the absence of regulatory certainty regarding its BEE status. The Burnstone license expires and will have to be renewed in a mere two years and there must be realistic fears that the company will be forced to do a hasty and perhaps counter-productive empowerment deal. Qala probably has no such worries, with 26% BEE partner Lilitha appearing locked in for the duration of its license (until 2051).

The Burnstone reopening is in fact a calculated gamble that the “once empowered, always empowered” principle will remain standing in the face of opposition from the Department of Petroleum and Mineral Resources (DPMR). In 2021, the High Court ruled that if a mining house historically met its 26% (or subsequent 30%) black ownership targets, it retains its compliant status in perpetuity, even if the original black empowerment partners exit. But the DPMR is in the process of attempting to assume regulatory power over the ownership issue through amendments to the Minerals and Petroleum Resources Development Act.