Mining has played a significant role in SA’s economy for more than a century. Investment in various minerals has made SA a leading mining nation. While sectors such as services have increased in competitiveness, mining remains a cornerstone of the country’s economy.
In 2024 the mining industry employed 473,484 people (earning R195.3bn), contributed R442.7bn to the GDP, and generated R43.6bn in company taxes and royalties.
In the past two decades SA’s mining investments have sharply declined, reducing prospects for sustained mining operations. The mining industry has encountered reduced productivity, escalating costs in mining composite input (an index for cost pressures faced by the mining sector compared to changes in commodity prices from which mining derives revenue), expensive deep mine shafts and closures compounded by declining ore grades.
The mining industry has been on a downward trajectory in terms of at least three indicators, namely: contribution to GDP; the number of people employed; and investments in mining exploration. Recent shifts in international financial institutions’ funding priorities from fossil fuels investments to low-carbon projects has adversely affected overall investments in SA’s mining operations.
During his budget vote presentation to parliament in July 2025, minerals & petroleum resources minister Gwede Mantashe said SA needed to invest in new minerals exploration to maintain its mining industry. The SA government recognises that mining industry’s future relies on finding new mineral reserves. In July a Junior Mining Exploration Fund was announced, with a minimum allocation of R200m, jointly funded by the National Treasury and the Industrial Development Corporation. The fund will enable the discovery of new minerals that are essential for a range of industries, from advanced manufacturing to technology and infrastructure development.
Cause for concern is SA’s decreasing investment in mining exploration, especially given the global recognition of mining as a catalyst for industrialisation and essential economic growth. Despite the country’s geological endowment, today’s global market for mining capital is competitive — and SA is not attractive enough for large investment in exploration (and mine developments).
The Minerals Council SA reports that SA’s mining exploration budget has decreased from $404m in 2006, representing 6.2% of global exploration investments, to considerably less than $100m in 2018, which was about 1% of the global mining exploration budget. By 2024 SA spent some $43.3m on mineral exploration.
It is unrealistic to expect optimal mining industry performance while input costs on investments in exploration remain fractionally less by global comparison. Despite constraints, mining remains an important driver of private sector investments of almost R160bn in 2024. A perspective on comparative mining investments with other countries or regions of the world shows a general trend of Africa’s regression in the past 10 years.
While the other continents increased their share of mining exploration investments, Africa’s investments decreased significantly from 16% in 2014 to 10% in 2023. Conversely, during the same period Australia’s investments in mining exploration increased from 12% to 17%, the US from 7% to 13%, and Canada from 16% to 19%.
With the current geopolitical climate characterised by growing interest in minerals in general and critical minerals in particular, the expectation for increased mining exploration investments is not misplaced. With declining investments in exploration, SA finds itself competing with countries with increasingly lower production costs, such as Australia in the production of iron ore, and Russia on platinum group metals (PGMs).
SA’s mining fortunes are restrained by poor road, rail and port maintenance, which have restrained export efficiencies and escalated costs. Other adverse factors include criminal activity manifesting through theft of products, illegal mining and community dissatisfaction over mining’s social impact through protests with operational disruptions.
In the era of global rankings across various indicators, the competitiveness of mining investments in continental jurisdictions has become a yardstick against which investors take decisions to invest. It is the ability to attract investment that determines the viability of mining operations. According to the Fraser Institute’s Annual Survey of Mining Companies (2024), SA has fallen from its Investment Attractiveness Index as the policy score decreased by more than 20 points and dropped to the 70th spot out of 82 jurisdictions, after ranking 64th out of 86 in 2023.
Out of 82 countries, SA registered at the bottom 10 of 15 indicators on matters relating to uncertainty concerning disputed land claims; regulatory duplication and inconsistencies; uncertainty concerning the administration; interpretation and enforcement of existing regulations; and labour regulation/employment agreements and labour militancy/work disruptions.
The government is aware of these and other challenges and, in 2022, the erstwhile department of minerals resources & energy published an exploration strategy for SA’s mining industry. The objective of the strategy is to secure a 5% share of global exploration expenditure and catalyse mineral exploration to increase mining contribution to the economy in the next five years to 2027. The strategy is founded on three essential pillars: economic growth; social welfare; and environmental stewardship.
Further, in June 2025 a Critical Minerals & Metals Strategy for SA was published, marking a significant milestone in the government’s efforts to modernise the mining sector. The strategy serves as the primary policy position towards leveraging mineral resources for economic growth, industrial development and job creation in the 21st century.
• Dr Tshitereke is an honorary professor at Unisa’s Thabo Mbeki School of Public & International Affairs.
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