South Africa’s mining industry faces decline without international investment, but political uncertainty and civil unrest only impedes hopes to rejuvenate it.
Mining unquestionably remains one of South Africa’s most important economic sectors, contributing 8-10 per cent of national GDP and, on average, each of its almost half a million strong labour force providing income for nine dependents.
But South Africa’s share of the global mining exploration expenditure dropped a staggering 20.5 per cent in 2020 to rank only sixth in Africa and represent less than one per cent of the global exploration spend – its lowest place in decades and a devastating position for a country whose geological attractiveness should protect its status as a top global player.
Despite still being valued at $77.4 million, this huge reduction in exploration has adverse knock-on effects for the pipeline of planned investment in brownfield, mid-stream and downstream mineral value chain projects, and the supply chain, all of which will shrink the industry at least for the foreseeable future.
Anxieties around policy and regulatory uncertainty are compounded by the longstanding concerns about the ANC leadership’s handling of its factional divisions.
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