Miningweb Weekly: Peter Major - “Gold’s peaked, but South Africa’s next big bet is rare earths”

In this week’s Miningweb Weekly, veteran analyst Peter Major joins Alec Hogg to unpack the latest in the global commodities rollercoaster. From gold and Bitcoin’s cooling rally to South Africa’s rare earth jackpot at Steenkampskraal, Major explains why investors should brace for a three-year plateau in precious metals - and why America’s growing interest in rare earths could rewrite South Africa’s mining future. A sharp, grounded look at where the smart money’s heading next.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.Gold, silver and Bitcoin have all been losing steam after a blistering run, and according to mining analyst Peter Major, the boom is over for now. In this week’s Miningweb Weekly with Alec Hogg, Major says the rally has run its course and investors should expect a few years of cooling before any serious rebound.“I think they’ve peaked for the foreseeable future,” Major said. “I know history doesn’t repeat itself exactly, but it rhymes. What we’re seeing now looks a lot like the 1970s when commodities shot up after years of underpricing. This cycle has already played out its catch-up.”He explained that while gold had to rise to correct years of undervaluation against inflation and currency devaluation, it has now reached a natural balance. “Gold and Bitcoin shot up to unprecedented levels. All the magnificent reasons people gave for that have dissipated into the market. Now people are asking: do I keep holding or take profits? The smart ones are taking profits.”For South African investors, though, the story is more nuanced. The Rand’s depreciation means gold in Rand terms remains a reliable hedge. “If you’re holding Krugerrands, you’ve done really well. The Rand’s averaged about 5.5 percent depreciation a year for the last forty years, and gold has averaged maybe 9 or 10 percent growth. Combine that and you’ve had a great, steady return.”Major believes slow and steady wins the race. “The people who held Krugerrands or gold coins over time have done okay, and they’ll probably keep doing okay. It’s not about shooting the lights out in one year. It’s about steady growth like Warren Buffett says. That’s what builds wealth.”When Alec joked about Peter’s own gold stash, Major laughed. “I’ve probably had seven or eight percent of my assets in gold and silver without planning to. It helped me out this year. I sold some of my bullion to invest in mines that hadn’t appreciated, and both those operations have almost doubled in value. It’s funny how that works.”But the real excitement of this week’s discussion came when Alec brought up Steenkampskraal, South Africa’s high-grade rare earth deposit that’s drawing renewed global interest. Major has been talking about the project for months, calling it one of the richest rare earth deposits in the world.“Anglo American worked that site decades ago,” he explained. “They did everything properly. Their data from the 1960s is still immaculate. I’ve looked at those old bankable feasibility studies—they’re leather-bound works of art. The numbers don’t age. The data is as valid today as if you flew a drone over it.”He says the grade at Steenkampskraal is staggering. “The documents show the rare earth grade was equivalent to a ninety-gram-per-ton gold deposit. For context, Harmony’s running at five or six grams a ton. So it’s roughly fifteen times richer. It’s arguably the richest rare earth deposit on Earth.”Still, Major warns that mining today isn’t what it used to be. “A hundred years ago, if you found something high grade, you could mine it tomorrow and sell it the next day. Now you’ve got to pass environmental, medical and radiation standards. You’ve got to wait for half a dozen government departments to sign off. That’s where time becomes your biggest cost.”He stressed that time and entry price are the two key variables in any investment. “What’s your entry price, and how long till you get a return? That’s what investors in Steenkampskraal need to ask. It’s not listed. It’s illiquid. Who do you sell to? How do you exit? That’s a big risk.”Still, the potential upside is massive if South Africa plays its cards right. “The Americans would love to have this resource,” said Major. “If we were a little more cooperative with them, I think Trump’s team would already be developing it. It’s not too late. If we went to them now and said, ‘You need rare earths for your EVs, your drones, your wind turbines—we’ve got them,’ we could make a deal that helps both countries.”Alec noted that South Africa’s political direction has complicated foreign partnerships, but Major sees opportunity if the leadership shifts. “It doesn’t matter what party leads,” he said. “We just need someone who wants to work with the United States. Jobs come from investment, and investment comes from good relationships with the people who have money.”He also criticized government inertia over South Africa’s long-delayed mining cadastral system, which would make licensing transparent and reduce corruption. “Half of Africa uses a South African-built cadastral system that works beautifully, but we don’t use it ourselves. That tells you everything. Those in charge don’t want a system that’s simple and hard to corrupt.”On costs, Major was skeptical of reports showing only a 2.5 percent annual increase in mining input prices. “That looks too good to be true,” he said. “If that number’s real, then give everyone in the industry a bonus. But I suspect it’s month-on-month, not year-on-year. Still, if it’s true, it shows how tough and efficient our miners are.”He said managers must prepare for turbulence as gold prices soften. “When revenues rise, everyone relaxes. Suppliers hike their prices. When revenues fall, that’s when real management happens. You’ve got to control costs fast, like the American auto industry used to do. They’d just tell suppliers: you’re taking a thirty-percent cut or you’re out. It’s brutal, but it works.”Asked about South Africa’s unions, Major surprised Alec with a note of optimism. “Believe it or not, our unions are more realistic than many politicians. They’re plugged into the real economy because they deal with jobs and workers every day. The politicians live in another world. They’ve got unlimited money and no clue what ordinary people face.”As the conversation wound down, Alec noted that President Ramaphosa and many senior politicians are running out of time to secure a positive legacy. Major agreed that the cracks are showing. “I see the status quo breaking. There’s light coming through the cracks. Maybe it’s pressure from inside, maybe outside, but it’s happening. We just need leaders who want to fix things, not protect what’s broken.”For now, Major says the smart money should stay patient. “Gold’s had its run. Bitcoin too. But rare earths — that’s the next big story. If we get it right, South Africa could be at the center of the next global resource boom.”

Miningweb Weekly: Peter Major - “Gold’s peaked, but South Africa’s next big bet is rare earths”

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