By South Africa hosted the Invest in Africa Mining Indaba in Cape Town last week, 3 to 6 February 2024, where leaders, investors and mine executives gathered to discuss opportunities in the mining sector in Africa.
During his welcome address, the South African Minister for the Department of Mineral Resources and Energy (DMRE) Gwede Mantashe, told the investors that, South Africa and the rest of Africa were also affected by the global surge in energy prices in 2022 due to geopolitical conflicts.
“The year 2022 has been a difficult year for the world and Africa in particular; it is a year in which international and domestic factors negatively affected mining production and mineral sales. International factors including soring energy prices due to the ongoing geopolitical dynamics, whereas domestic factors including ongoing power supply disruptions, known here as load-shedding and logistical bottlenecks on our railways and ports,” said Mantashe.
The minister alerted the investors that South Africa, though a preferred destination for investment, it is faced with a serious challenge of load-shedding and dysfunctional rail networks and ports. He further invited the investors to assist in bouncing off ideas on how to resolve the challenges.
According to Mantashe, the mining sector had to dig deep into their pockets to pay for operations due to soring fuel prices in 2022. He said though geopolitical conflicts happen far from the African continent, the impact is felt on domestic soil.
Load-shedding has been eroding the economy of South Africa and negatively affecting production, with some industries being forced to shed some employees. Gwede Mantashe says the mining sector has also been negatively affected by the power cuts. The year 2022, experienced escalated power supply disruptions; which in turn; negatively affected production in the mining sector across commodities.
“It is estimated that load-shedding costed the economy about R1 billion a day,” said the Minister.
Mantashe told the investors that the mining sector in South Africa experienced a 9% decline in production due to load-shedding; added to that, though there was some production, the mines could not move their stock due to the malfunctioning rail and ports; they kept stock piles worth billions slowing down the economy of South Africa.
“As investors come here, they must appreciate that we have these challenges and we want to overcome them,” said Minister Gwede Mantashe.
Renewable energy is currently on the lips of global leaders, it is more urgent for South Africa as power cuts harm its economy. Pointing Goldfields out as an example, the Minister said the South African company was the first to approach government and apply for a license to have their own solar generators, of which his department allowed them, as a result, while the sector was declining in production, Goldfields experienced a 10% increase in production.
Minister Gwede Mantashe affirmed investors that South Africa is doing something to resolve the challenges and advised that they should also invest in renewable energy to defy negative production. He said government is also dealing with the ports and rail matter to ensure that the economy is running smoothly.
