As the second Africa Climate Summit wrapped up this week, it is becoming clear that the continent is repositioning itself as an engine of climate solutions rather than a recipient of aid. In the words of Ethiopian prime minister Abiy Ahmed at the summit's opening on Monday: “We are not here to negotiate our survival. We are here to design the world’s next climate economy.”
This shift, and South Africa’s current presidency of the G20, makes this a crucial time for the government to demonstrate leadership by driving Africa’s green industrialisation. This industrialisation has many aspects, but one of the most important levers is mineral beneficiation on the continent.
South Africa sits atop one of the richest mineral endowments on the planet. We are the world’s leading producer of platinum group metals (PGMs), chromium and manganese; a significant producer of gold, vanadium, cobalt, titanium and uranium; and hold over 90% of global PGM reserves (according to the Minerals Council South Africa). With such bounty, we should be Africa’s undisputed leader in green industrialisation — the driving force of future global economic growth.
But instead we remain trapped in an economic paradox: exporting raw materials while importing finished products that carry far greater value. Mining’s share of South Africa’s GDP has declined substantially, from about 21% in 1970 to approximately 7% by 2023. Though it still accounts for about 45%-60% of exports, depending on the metrics used, the value added locally is only 9%.
The global clean energy transition is accelerating rapidly. The International Energy Agency projects that demand for critical minerals required for renewable energy and electric vehicles will quadruple by 2040. South Africa’s rich deposits, especially PGMs and manganese, position it well to lead on the continent.
Countries like Indonesia have demonstrated the economic benefits of value addition. Since banning raw nickel exports in 2014, Indonesia has attracted nearly $14bn (about R245bn) in smelter investments, expanded refining capacity, and increased nickel-related exports by 30 times, supporting more than 85,000 jobs in industrial hubs such as Morowali.
South Africa, by contrast, exports the bulk of its minerals raw despite competitive processing costs for some products, like manganese sulphate. Infrastructure bottlenecks, rising electricity prices and policy inconsistency all contribute to this underperformance.
Electricity prices in South Africa have increased roughly 500% over the past decade, hitting industry hard and compounding challenges from frequent load-shedding, which cost the economy an estimated R899m per day in 2023. High energy costs and unreliable supply deter energy-intensive industries, such as those involved in ferroalloys and battery materials.
The window is closing fast. The minerals are here. The demand is surging globally. What needs to catch up is South Africa’s strategic policy and execution
Infrastructure constraints in rail and port logistics further reduce competitiveness. Mining exports rely heavily on these systems, which have failed to keep pace with demand and investment needs.
Policy-wise, mineral beneficiation has been a stated priority in government policy frameworks since 2007, but implementation has been uneven and fragmented across various departments. The Minerals Council South Africa supports beneficiation only where it is economically viable and stresses the need for cautious consideration of export restrictions or taxes to avoid deterring investment and risking job losses.
Positive signs include the government's approval of a critical minerals strategy in 2025, which outlines value addition, investment, infrastructure and innovation, aimed at unlocking South Africa’s potential. R1bn in incentives has been allocated to promote electric vehicle and battery manufacturing, with the expectation of leveraging R30bn in private investment.
Renewable energy capacity from the REIPPPP (renewable energy independent power producer procurement programme) has reached over 6,200MW, generating significant CO₂ and water savings while helping diversify the energy mix away from coal. South Africa’s climate financing and energy transition pace lag behind that of its global peers.
The EU’s commitment of €4.7bn (about R96bn) under the Global Gateway programme to clean energy, local beneficiation and critical mineral processing in South Africa signals international confidence in the country’s potential — if policy and infrastructure align.
South Africa must leverage this moment with decisive action by providing investors with policy certainty. To unlock a green industrial future, we need to:
- Accelerate the implementation of the critical minerals strategy by establishing binding timelines, clear targets, public-private oversight and interdepartmental co-operation to ensure its effective execution;
- Introduce preferential renewable energy tariffs and incentives for beneficiation plants to counter high energy costs;
- Develop beneficiation hubs and special economic zones strategically located near mineral reserves and export ports, such as a battery manufacturing hub in the Northern Cape.
- Accelerate infrastructure upgrades in rail, ports and energy to ease logistical bottlenecks that hamper value-added industries;
- Invest in skills development and research by aligning universities, vocational institutes and industry around battery materials, PGMs, green hydrogen and other emerging sectors;
- Facilitate public-private partnerships to unlock co-investment and innovation in beneficiation value chains; and
- Ensure robust environmental and social governance frameworks to promote sustainable mining and beneficiation practices.
South Africa has the minerals, workforce and industrial potential to lead Africa’s green industrial revolution. But potential alone is not enough — bold political will, strategic co-ordination and unyielding execution are essential. Beneficiation is not merely an economic strategy; it is about economic sovereignty and dignity.
As president of the G20 and a member of Brics+, South Africa should demonstrate leadership by announcing a comprehensive mineral beneficiation and green industrialisation strategy. This strategy should include incentives, infrastructure plans, skills development, and a unifying continental value-added agenda that leverages the African Continental Free Trade Area and international climate finance.
The window is closing fast. The minerals are here. The demand is surging globally. What needs to catch up is South Africa’s strategic policy and execution.
• Lukuko is Africa political adviser for the Fossil Fuel Non-Proliferation Treaty Initiative
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