Suggestions for fostering growth

Attract talent

Build trust

Capitalise on hydrogen economy

Conducive regulatory environment

Focus points to accelerate growth

Place more focus on promoting the mining industry as a career opportunity for younger people. Talent must also be retained, as many skilled South African workers are attracted to other jurisdictions, including Australia, Canada and Indonesia.

The mining industry’s motivation has evolved from being focused purely on profit to managing the impact of mining on the broader society. Some in government seem to still have a negative perception about the industry. To build more trust, a broader range of stakeholders, including civil society, must be engaged. Civil society could help to bridge the gap between government, mining companies and labour. Mining houses must be clearer about what they can do and what technical capabilities they can offer government.

A better social compact will also bode well from an international perspective, as well as the elevation of environmental, social and governance issues.

Interest in the global hydrogen economy is growing rapidly and South Africa must ensure that it remains at the forefront of developments. As a major PGMs producer, South Africa has an unprecedented opportunity to capitalise on hydrogen developments, ensuring a long-term future for its mining industry.

Regulatory uncertainty is a disincentive for investors and South Africa must provide more certainty or it risks remaining at the wrong end of the investment scale.

Government must also take decisive action to implement its ideas and plans. Vague intentions will not attract the capital that is needed to grow the South African economy.

Suggestions for fostering growth

Suggestions to enhance investor confidence – continued

Drive productivity and innovation South African mines are ageing operations and must be more productive to remain competitive.

– Labour and communities must be brought on board with productivity improvements.

– New technology must be ‘people-centred’, considering South Africa’s high unemployment rate.

– New technology could also shape a role for more women to be employed in the mining industry.

Improve Africa trade Following the pandemic, the world is in a “shift-mode” in terms of alliances. There is an opportunity for South Africa to improve its relationship with other African countries for multilateral trade and collaboration.

Invest in infrastructure Immediate action on infrastructure, especially energy and logistics infrastructure, is needed to ensure South African mining operations can compete with competitors in the rest of the world.

– Electricity: Work with government to build an energy system that is reliable, greener and advances the country to its carbon neutrality goals. Invest in Eskom to make it work and allow for mining companies to provide their own electricity.

– The mining sector has already shown its willingness to help the country bridge its large electricity supply deficit by announcing a potential 3 900 MW of renewable-energy projects. The mining industry is involved in various stages of building plants, conducting studies, planning and applications for solar, wind and battery energy projects (Mining Weekly, 2021).

– Transport: Fix Transnet’s rail infrastructure to enable bulk commodity producers to cost-effectively export their production. Public–private partnerships are considered to be the solution to bolster rail infrastructure investments and performance.

Government’s commitment to introduce third-party rolling stock on the rail system by August 2022 is applauded, but private-sector participation must extend to beyond not only rolling stock but to the entire system.

Suggestions for fostering growth

Suggestions to enhance investor confidence – continued

Lower input costs Administered costs like electricity, transport logistics operated by Transnet on railways and ports are driving up input costs for the mining industry. A predictable price path for electricity is needed to ensure the viability of the mining sector and broader economy.

Promote exploration South Africa needs to promote minerals exploration as the country has a significant quantity of untapped resources. Government must put in place incentives and an effective and efficient licensing regime to promote the country as a partner of choice to unlock investment in mining and exploration. The Minerals Council believes South Africa can attract 5% of global exploration expenditure.

Rally behind renewables South Africa has an opportunity to ride the global wave of growth driven by the adoption of renewable-energy solutions. The country must organise itself better to take advantage of these opportunities and collectively rally behind the adoption of renewable energy.