By Preliminary findings on South African mining industry indicate that the sector remains an attractive investor destination, more so as the industry ventures into diversifying.
The Minister for the Department of Minerals and Petroleum Resources Mr Gwede Mantashe told the Africa Down Under (ADU) conference yesterday in Perth, Australia, that South Africa’s mining industry remains viable and as it transitions to the just energy era, more diverse minerals have been discovered and are produced.
Looking to woo investors and mining companies who are already in South Africa to stay in the country, Mantashe told the industry gurus that the South African mining industry is increasingly diversifying from an era that was associated with gold mining to an industry with a diverse range of mineral resources such as platinum group metals (PGMs), coal, gold, copper, manganese, vanadium, and other natural resources that are considered critical for the just transition.
“In our quest for evidence-based state of the South African mining industry report, we have commissioned a study on “The State of Mining” by the state-owned entity, Mintek, in collaboration with the Minerals Council SA, Mapungubwe Institute for Strategic Reflection (Mistra), and researchers from reputable institutions of higher education.
While the study is work in progress, I can disclose that it considers several key factors, including but not limited to, the contribution of mining to the economy, and the performance and trends of each commodity in terms of production, exploration, exports, sales, employment, and prices,” said Minister Mantashe.
Mantashe said South Africa has taken a step further to complement the research currently underway to help grow the mining industry, he said going side by side with the research is the development of South Africa’s “Critical Minerals Strategy” to serve as the nation’s blueprint for the exploration, exploitation, and processing of these minerals.
“I can divulge that, to be fit-for-purpose, the strategy ranks the criticality of each mineral using various methodologies such as supply risk, employment indicator, domestic and export sales indicators, and substitutability indicator among others. There is a very strong case emerging out of these studies that the South African mining industry remains an attractive investment destination,” he said.
Minister Gwede Mantashe said the mining industry in South Africa is a sunrise industry and he is confident that the research will demystify all the critics that the sector has reached its end.
Spanning over a period of 100 years, gold mining which has been the pillar of South Africa’s economy over the years has come under serious scrutiny, the naysayers saying it has reached its end.
The Minister acknowledged that gold mining has now reached its mature phase characterised by deep level mines stretching up to 4 kilometres deep and heightened safety concerns that directly impact production.
However, gold mining remains a strong key economic performer as it managed to produce 96 tonnes of gold production in 2023, making South Africa the 13th largest gold producer in the world and 4th in Africa.
“South Africa is the world’s largest producer of PGMs, accounting for approximately 73% of the global new mine supply of platinum, 38% of palladium, and 81% of rhodium supply to the global commodities market in 2023. This sector has the potential to play a catalytic role not only in sustaining the South African mining industry, but in the growth of the South African economy and modernisation of its infrastructure as was the case with gold mining in the mid-20th century.
At current production rates, the known PGM reserves will support South Africa’s mining activities and investments for more than 200 years. It is in this context, that we are advancing coordinated cooperation between the government and all stakeholders in the PGM industry aimed at creating value for the country’s PGM production and sales,” said Mantashe.
As the world transitions into renewable energy, concerns have been raised about coal mining in the industry and worry that mines will soon be forced to shut down and will not be able to find business across the world. However, Mantashe pointed out that coal is actually performing well.
“Despite the pressure to phase-out coal, and in direct contrast to the overall reduction in mining production in 2023, coal production increased from 230 million tonnes in 2022 to 232 million tonnes in 2023. About 25 percent of the coal produced in our country gets exported to various countries, thus positioning South Africa as the fifth largest coal exporter.
In addition, the price of coal increased significantly post 2020, thereby contributing to the increase in the number of direct employees and employee earnings which reflects a rise in both the workforce and compensation. Consequently, coal mining is actively contributing to the nation’s strategic priorities of driving inclusive growth, job creation and reducing poverty. In light of these developments, we are certain that coal will continue to play an integral part in South Africa’s economy as the primary source of our energy generation,” he said.
