Despite South Africa’s large reserves of critical minerals, exploration remains one of the biggest constraints on efforts to build battery and clean energy industries, according to industry leaders.
Globally, $13bn was spent on mineral exploration in 2023, yet Africa attracted only 10% of that total and South Africa just 1%, panellists said in a discussion on critical minerals at the South Africa Investment Conference (Saica) 2026 on Tuesday.
The figures point to a broader problem: South Africa’s mineral reserves are still not attracting enough early-stage investment to support a future pipeline of projects.
The issue goes beyond mining output. South Africa wants to capture more value from its minerals base by expanding into processing and, eventually, parts of the battery and clean energy supply chain. But without more discoveries and bankable deposits, those plans are unlikely to move far beyond policy.
One of the main funding tools discussed was the Junior Mining Exploration Fund, managed by the Industrial Development Corporation (IDC), which is intended to draw more private capital into early-stage exploration. Originally seeded with R400m, the fund was boosted to R1bn after a R600m contribution from Anglo American, announced on Tuesday by Kumba Iron Ore CEO Mpumi Zikalala.
Zikalala, representing Anglo American and Kumba, said, “Mining starts with exploration, and all players need to contribute to build a credible future supply pipeline.”
The focus on exploration also reveals a longer-term problem in South Africa’s mining sector: many of today’s producing assets were discovered decades ago, while new discoveries have lagged behind rival mining jurisdictions.
With exploration often taking 13 to 15 years before a mine can be developed, and no guarantee that a discovery will become a viable operation, the industry faces pressure to rebuild the pipeline of new finds if it wants to secure future supply for battery and clean energy markets.
Some mining companies are already shifting capital toward minerals linked to battery and clean energy demand. African Rainbow Minerals (ARM) CEO Phillip Tobias said ARM’s portfolio includes platinum group metals, which are currently used in catalytic converters and could play a future role in hydrogen technology, as well as manganese from its Black Rock Mine, which he said is important for battery storage.
He also pointed to chrome from Nkomati and ARM’s investment in Surge Copper in Canada as part of the company’s efforts to expand its exposure to transition-facing minerals.
But geology alone is unlikely to be enough to attract sustained investment. For mining and processing projects, investors typically look for a combination of resource quality, infrastructure access, regulatory clarity and long-term commercial viability.
That shifts the focus from what lies underground to whether South Africa can create the conditions needed to turn deposits into investable projects.
Policy and mining administration emerged as among the clearest constraints on investment. Minerals Council South Africa CEO Mzila Mthenjane said mining investors require both “hard” and “soft” infrastructure, arguing that security of tenure, a functional cadastral system and predictable regulation are just as important as roads, rail and energy supply.
“Investment depends not only on hard infrastructure but also on soft infrastructure: functional policy and administration that enable capital flow,” he said.
Mineral and petroleum resources minister Gwede Mantashe argued that South Africa should add more value to minerals closer to the point of production rather than continue exporting largely unprocessed material.
He said government’s critical minerals strategy is intended to support beneficiation and keep more value inside the domestic economy.
Mantashe also said South Africa was trying to strengthen exploration through the IDC-backed fund and by pushing legislative reforms intended to provide greater certainty to investors.
But any serious attempt to build battery and clean energy supply chains will also depend on how South Africa works with the rest of the region.
While South Africa has a dominant position in platinum group metals and manganese, several of the minerals central to battery chemistries, including lithium, cobalt and copper, are more abundant elsewhere on the continent. That means efforts to build supply chains at scale are likely to depend on regional co-ordination rather than a purely domestic strategy.
AECI chair Philisiwe Sibiya said South Africa is more likely to succeed as a regional processing and industrial hub than as a standalone competitor.
With neighbouring countries supplying complementary minerals and South Africa bringing industrial capacity, chemicals expertise, capital markets and logistics, she argued that the country is better placed to anchor midstream processing and related manufacturing than to try to dominate the entire value chain alone.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.