South Africa’s critical minerals endowment is becoming increasingly central to the clean energy transition around the globe. Platinum group metals (PGMs) — manganese and vanadium — are among resources that represent the building blocks in technologies driving this shift, including hydrogen fuel cells, energy storage technologies and future battery platforms. We persist in exporting these minerals in their raw form despite the increasing international demand.
The clean energy technology sector is expected to be worth more than $300bn (about R5.5-trillion) by 2030. South Africa continues to export its manganese ore at less than R4,000 per tonne, even though processed battery-grade manganese sulphate is trading for up to R46,000 per tonne on the international market.
The same discrepancy applies to PGMs. South Africa’s PGMs are exported at an average of about R28,000 per ounce, yet their value can increase five to tenfold when processed into high-value components such as fuel cell stacks and electrolysers, commanding prices between R140,000 and R280,000 per ounce.
While largely exported as unprocessed ore, the value of vanadium rises significantly when converted into electrolyte solutions used in long duration energy storage systems. We are leaving billions on the table by failing to beneficiate at scale.This loss is not just measured in export margins, but in forfeited tax revenue, missed employment gains, and unrealised regional influence.
The local multiplier effects of beneficiation are significant, given that every job created in mineral processing can generate two to four additional jobs in the downstream sector. Moreover, these industries are knowledge-intensive and offer higher wages and longer-term skills development potential.
Other mineral-rich countries have shown how deliberate policy can shift their position in global value chains. Indonesia’s 2020 ban on nickel ore exports drove investment in domestic battery materials and secured its role in electric vehicle supply chains. Chile leveraged its lithium reserves to attract joint ventures and technology transfers that support local industrialisation.
These examples demonstrate that resource-rich nations do not have to remain raw material suppliers. With the right interventions, they can build competitive, value-adding industries.
The EU, China, and the US are localising battery production, green hydrogen, and renewable energy systems. South Africa, by contrast, remains trapped in its traditional role as a raw material supplier. This path deepens reliance on volatile commodity markets, instead of building resilience through industrial diversification.
This is not just an economic issue. It is a national strategic imperative. If we do not secure our place in these emerging value chains, we risk becoming a perpetual quarry in a global green economy. The most advanced nations are not only decarbonising, they are redesigning their economies. And in many cases, they are doing it with minerals mined from our soil.
But it doesn’t have to be this way.
South Africa has a solid base. The department of science & innovation’s Hydrogen South Africa (HySA) programme has created locally-made PGMs-based fuel cell catalysts and conducted world-class hydrogen and fuel cell research. The world’s first hydrogen-powered mining vehicle was tested at Anglo American’s Mogalakwena mine utilising green hydrogen. Bushveld Energy constructed Africa’s first vanadium redox flow battery at Eskom’s Rosherville facility, and is building a vanadium electrolyte factory in the Eastern Cape.
The Industrial Development Corporation is also investing in battery value chain localisation. Mintek and the CSIR are among the key institutions contributing to beneficiation and materials research, supporting the objectives outlined in the Hydrogen Society Roadmap and the Industrial Policy Action Plan.
Wide implementation gaps persist. Underutilised industrial zones and energy reliability issues threaten investor confidence, and long infrastructure project clearance procedures hinder implementation. Agile co-operation among government agencies is needed to overcome these barriers, not the creation of additional strategies.
Reliable, value-adding supply chains are increasingly shaping investor sentiment. South Africa’s infrastructure gaps, inconsistent regulations and fragmented industrial policy deter foreign investment. Without reforms to improve energy reliability, streamline project approvals and align industrial strategy with trade, South Africa will struggle to attract the capital needed to industrialise beyond raw material extraction.
To shift from extraction to industrialisation, the country should prioritise three interventions: establish a sovereign beneficiation fund to de-risk private investment in processing and manufacturing; develop regional processing hubs under the African Continental Free Trade Area to leverage shared infrastructure; and enforce local content requirements in green hydrogen and battery projects to stimulate demand for beneficiated materials.
Countries that don’t secure a role in clean energy value chains risk being sidelined, as global trade shifts to industrial capacity over mineral exports. South Africa can compete, though it requires focused execution, strategic partnerships, and dedicated leadership. The stakes are high, but so are the rewards of building an industrially self-reliant country.
Mafokosi is a public servant and a master of management in energy leadership candidate at Wits University
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