Caledonia among gold miners avoiding Mideast refining chokepoint caused by Iran war

Zimbabwe-focused Caledonia Mining (NYSE-A: CMCL; LSE-A: CMCL) is rerouting gold sales through South Africa to avoid disruption from the Iran war, offering a glimpse of how bullion flows are being reshaped as Middle East logistics come under strain.

Dubai has become a key conduit linking African production with markets in India, China and Europe, with roughly 20% of global gold flows passing through the emirate. Disruptions to flights and regional transport routes in early March following escalating conflict with Iran forced traders and exporters to seek alternative pathways, exposing a major chokepoint in the bullion trade.

“Caledonia is selling its exported portion of gold through South Africa (rather than the Middle East), ensuring uninterrupted revenue flows for that portion,” the company said in annual results issued on Monday. “2025 has been a strong year for the group, marked by record financial performance, excellent cash generation and continued strategic progress.”

The shift highlights a broader vulnerability in the global gold trade, exposing the risks of relying on a single hub and demonstrating how producers can adapt by maintaining optionality across refining and logistics routes as geopolitical tensions rise. Ghana, Africa’s largest gold producer, shifted away from the United Arab Emirates this month after flight disruptions threatened shipments, Reuters reported.

Diversified networks

Most concrete shifts have so far emerged at the national and trading level rather than from individual producers. Large-cap miners Barrick Gold (TSX: ABX; NYSE: GOLD), Newmont (NYSE: NEM; TSX: NGT) and AngloGold Ashanti (NYSE: AU; JSE: ANG) already sell into diversified refining networks spanning Europe, North America and Asia, giving them the flexibility to shift deliveries between hubs.

The UAE typically handles a large share of African gold flows, particularly from artisanal production, making it a critical but increasingly exposed node in the supply chain. Bullion traders have also rerouted shipments through other refining centres, including Switzerland and Asia, although higher oil prices are increasing transport costs and delivery times.

For southern African operators, geography provides a more immediate workaround. South Africa hosts significant refining capacity, allowing producers in neighbouring countries to bypass Middle Eastern routes entirely, a strategy Caledonia has now put into practice.

Stable output

The company reported annual revenue rose 46% to $267.7 million while profit after tax jumped 193% to $67.5 million, driven by higher gold prices and stable production from its Blanket mine in Zimbabwe.

Shares in Caledonia have gained 16% since Friday to $23.30 apiece on Wednesday morning in New York, valuing the company at $431 million.

It’s a bright spot compared with a roughly 30% sell-off in senior copper and gold equities, which has been driven mainly by weaker metal prices and rising cost concerns linked to oil, BMO mining analyst Matt Murphy said in a note on Wednesday. Macroeconomic uncertainty is likely to keep valuations subdued in the near term, he said.

Energy options

Caledonia has reduced exposure to energy market volatility linked to the conflict. Diesel accounts for less than 3% of operating costs and just 2% of power use, down from 8% in 2020, with solar supplying about 20% of electricity needs.

Blanket produced 76,213 oz. gold in 2025, with total group sales of 79,075 ounces. It maintained output despite lower grades and intermittent power outages late in the year, Caledonia said.

The company is advancing its next stage of growth at the Bilboes project in 75 km north of Bulawayo in northwestern Zimbabwe. The project has 1.75 million oz. in reserves and may produce 200,000 oz. annually, according to a November feasibility study. First output is targeted for late 2028.