Johannesburg – Sibanye-Stillwater is pushing ahead with the development of the Burnstone gold project in Mpumalanga, in what could become one of South Africa’s few significant new gold mines as the industry grapples with ageing operations, rising costs and declining production.
The decision comes as gold prices remain at record levels and miners increasingly favour shallower, lower-cost deposits rather than the deep and expensive shafts that once defined South Africa’s gold industry.
According to News24, Sibanye’s planned investment in Burnstone highlights how unusual it has become for major mining companies to commit capital to new South African gold production.
Sibanye’s latest results show the Burnstone project has received board approval following a restated feasibility study. The company plans to invest about R6.2 billion in the project, which is expected to produce about 130,000 ounces of gold a year at steady state.
The mine, near Balfour, will exploit the Kimberley Reef at an average depth of about 550 metres, significantly shallower than many of South Africa’s traditional deep-level gold mines. Sibanye says the project has 2.7 million ounces of reserves and 8.9 million ounces of resources.
The company expects mining to build up from 2027, with processing scheduled to begin in the first quarter of 2029.
Improved financial position
Business Day reported that Sibanye approved Burnstone alongside the Mount Lyell copper-gold project in Tasmania after a sharp improvement in earnings. Sibanye’s revenue rose 64% to R90 billion in the first half of 2026, while adjusted EBITDA more than doubled to R31.8 billion.
The improved financial position has given Sibanye greater room to fund new projects while reducing debt.
Sibanye CEO Richard Stewart said: “The group remained on track with its target of cutting gross debt by 50% over two to three years, while funding new projects from internally generated cash.”
The Burnstone development also reflects a broader shift in South African gold mining.
Reuters reported earlier this year that miners were turning towards shallower and surface operations as record gold prices improved the economics of projects that would previously have struggled to attract investment. South Africa’s gold production has fallen from about 1,000 tonnes at its peak in 1970 to roughly 90 tonnes a year.
Existing infrastructure
Another sign of the changing landscape is West Wits Mining’s Qala Shallows project, which became the country’s first new underground gold mine in about 15 years. Reuters reported that the project is designed to avoid the high costs associated with traditional deep-level mining.
Mining Weekly has also highlighted Burnstone’s existing infrastructure, including its shafts, processing facilities, tailings storage and extensive underground development.
This is important because using existing infrastructure can substantially reduce the capital and execution risks associated with developing a completely new mine.
Sibanye itself says Burnstone is intended to help shift its South African gold portfolio towards “shallower, lower-risk and longer-life production.”
The company expects the project to have a mine life of about 25 years, create up to 2,500 jobs at steady state and generate an estimated net present value of about R19.2 billion.
Unusual advantage
The bigger question is whether Burnstone will encourage other mining companies to follow.
Despite the gold-price boom, Reuters noted that South African miners remain cautious about committing billions of rand to new underground production because of high capital costs, labour challenges, depleted reserves and uncertainty over the long-term economics of deep-level mining.
For Sibanye, however, Burnstone offers a relatively unusual advantage: it is an advanced project with substantial infrastructure already in place rather than a completely new greenfield mine.
As Sibanye’s September 2026 results put it, the project is intended to strengthen “future reserve replacement and portfolio sustainability” while moving the company’s gold operations towards safer and longer-life production.
Follow African Insider on Facebook, X and Instagram
Picture: Pixabay
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
