“Emerging opportunities could help reverse the decline and foster growth in South Africa’s mining sector. However, achieving this requires a better understanding of how to support exploration and enhance funding.”
This was highlighted by mining leaders at the Joburg Indaba conference on Wednesday in Johannesburg, South Africa. Mzila Mthenjane, CEO of the Minerals Council SA, noted that while the government’s recently launched R400 million exploration fund is a positive step, significantly more investment is needed.
The Junior Mining Exploration Fund, a collaboration among the Industrial Development Corporation, Council for Geoscience, and the Department of Mineral Resources, aims to provide junior mining companies with funding for prospecting and improve access to mineral deposits.
Mthenjane expressed a desire for billions of rand to be invested in exploration from both the government and local and international financial institutions.
South Africa’s share of global exploration spending has fallen below 1%, down from a peak of 5% in 2003, and has remained under 1% for over a decade. Most current exploration and project development are concentrated in existing mining areas, primarily by major companies, with junior miners having limited involvement.
The local mining sector has “missed out on several boom cycles” due to inefficiencies like load-shedding and inadequate rail services. Mthenjane pointed out that about 50% of mineral production relies on Transnet Freight Rail and 40% depends on a stable electricity supply.
He argued that resolving these challenges would position the country to benefit from the increasing demand for minerals needed for the energy transition. “The industry must reposition itself to expand as infrastructure performance improves,” he said.
While short-term growth may come from existing operations returning to capacity as rail services improve, sustainable long-term growth requires increased exploration.
Nico Muller, CEO of Impala Platinum, emphasized the need for South Africa to create a more favorable environment for exploration to attract investment, including lowering the costs for junior miners to list on the JSE.
He noted that South Africa has significantly fewer listed junior miners compared to countries like Australia and Canada.
Afrimat CEO Andries van Heerden suggested that the Department of Mineral Resources could take practical steps to foster a better environment for smaller mining companies, particularly by reducing the frequency of section 54 notices under the Mine Health and Safety Act for minor issues, which can be detrimental to small operators.
