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Why 2025 is a window of possibility for JSE gold miners

The Rise of Capex and Exploration Intensity

In the past four years, the three largest gold producers on the JSE – AngloGold Ashanti, Harmony Gold, and Sibanye-Stillwater – have seen a significant increase in their capital expenditure (capex) and exploration intensity. This surge in spending has been driven by the need to maintain production levels, expand existing mines, and explore new deposits. Key statistics: + Total capex has risen by more than 80% in the past four years. + Exploration intensity has also increased by more than 80% in the same period. Drivers of the increase: + The need to maintain production levels in a declining gold price environment. + The desire to expand existing mines and increase production capacity.

Companies are taking proactive steps to reduce costs and improve competitiveness in the gold mining industry.

The Impact of Cost Reductions on Gold Mining Companies

The gold mining industry has been facing significant challenges in recent years, including rising costs, declining gold prices, and increasing competition. However, some companies are taking proactive steps to reduce their costs and improve their competitiveness. Gold Fields, a leading gold mining company, has been working to reduce its costs and improve its operational efficiency.

## Key Cost Reduction Strategies

Gold Fields has been implementing several cost reduction strategies to reduce its all-in sustaining costs (AISC). Some of the key strategies include:

  • Reducing energy costs: Gold Fields has been working to reduce its energy costs by increasing the use of renewable energy sources and improving its energy efficiency. Optimizing production processes: The company has been optimizing its production processes to reduce waste and improve productivity. Implementing cost-saving technologies: Gold Fields has been implementing cost-saving technologies, such as automation and digitalization, to improve its operational efficiency.

    The Rise of Central Bank Gold Purchases

    The World Gold Council’s latest report highlights a significant trend in the gold market: the rapid increase in central bank purchases. According to the council, central banks have broken through the 1,000-ton mark in 2024, with a notable acceleration in purchases during the fourth quarter of the year.

    Key Statistics

  • 1,000t: The milestone mark broken by central bank purchases in 2024
  • 333t: The sharp acceleration in central bank purchases during the fourth quarter of 2024
  • 2024: The year in which central bank purchases broke through the 1,000-ton mark

    • The Drivers Behind Central Bank Purchases

    Central bank purchases of gold have been on the rise in recent years, driven by a combination of factors. Some of the key drivers behind this trend include:

  • Inflation concerns: Central banks are seeking to diversify their reserves and reduce their dependence on fiat currencies, which are vulnerable to inflation. Currency devaluation: The decline in the value of major currencies, such as the US dollar, has made gold a more attractive store of value. Diversification: Central banks are looking to diversify their reserves and reduce their exposure to traditional assets, such as US Treasuries.

    Central banks’ gold buying habits reveal the global economy’s health.

    The central bank gold buying pace is critical to the outlook, Morgan Stanley said.

    The Central Bank Gold Buying Pace: A Critical Indicator

    The central bank gold buying pace is a key indicator of the global economy’s health. Morgan Stanley, a leading investment bank, has stated that the pace of central bank gold buying is critical to the outlook. This statement highlights the significance of central bank gold buying in understanding the global economic landscape.

    The Role of Central Bank Gold Buying in the Global Economy

    Central bank gold buying is a crucial aspect of monetary policy. Central banks use gold as a store of value and a hedge against inflation.

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