South African minerals may be worth a conservative $3trillion (R36 trillion). Despite this, these minerals won’t always be available.
South Africa’s mining industry once contributed close to a fifth to the country’s Gross Domestic Product (GDP). It currently contributes about 8% of South Africa’s GDP.
Mining revenue for 2016/2017 stood at R371 billion.
What we know about mining in South Africa and we are headed:
There is a need for South African government to manage the investment and exploitation of mineral resources in an environmentally and socially responsible and sustainable way. For instance, there is a strong need for bad practice to be curbed.
The revised mining Charter has rocked the industry. Following the announcement by the Mining Ministry, industry players reacted negatively. Despite this, the move by government is set to have long-lasting effects and aims to bring transformation in the sector.
The demand for gold from the world’s rapidly urbanising population is outstripping supply from mines. The demand for minerals has offered valuable opportunities. Trends in mining in South Africa show that the country has relatively good prospects for upstream oil and gas development. This presents an opportunity for more growth beyond a heavy reliance on gold. Experts say that for the industry to move into the future, South Africa has to change the way it mines. This is the only way to keep up with changes in the sector, while also ensuring growth.
Certain commodities are attracting investment into junior mining. This is creating more opportunities for access to market for small business owners.
Domestic input costs continue to rise due to higher energy prices and labour costs.
There has been a recovery in iron ore and gold prices.
It’s important for the South African mining sector to be creating an investor- friendly environment, with a stable regulatory environment.
South Africa needs to capitalise on its existing infrastructure, which encourages foreign investment.