Audience members listen to an address in the InfraTech Auditorium, at the Investing in Africa Mining Indaba 2023, held at the Cape Town International Convention Centre. (Photo: David Harrison)
Load-shedding and a drastic decline in rail and port capacity have cost mining billions, but there are massive opportunities waiting to be seized
Energy reliability, environmental impact, supply chain issues, a lack of technical skills, massive increases in demand, illegal mining activities, unreliable infrastructure, worker safety and operational security — these are some of the many issues the South African mining industry faces. They threaten the industry’s ability to capitalise on countless opportunities and realities that could drive investors to spend their money elsewhere.
Over the course of the four-day Investing in African Mining Indaba, these and many other problems were discussed at length, painting a rather bleak picture of the state of the local industry. Minister of Mineral Resources and Energy Gwede Mantashe said that load-shedding costs the South African economy as much as R1 billion per day, and President Cyril Ramaphosa noted that mineral production had contracted by 9% year-on-year in November 2022, in large part due to the energy crisis. It is estimated that infrastructure inefficiencies have resulted in a 15% decline in mineral sales.
The deterioration of Transnet’s rail and port capacity cost the mining industry R50 billion in lost opportunities in 2022 alone. The poor performance of rail cost bulk mineral exporters R35 billion in lost revenue in 2021. In 2022, coal exports through the Richards Bay Coal Terminal dropped to about 50 million tonnes — the worst performance through the terminal since 1993.
Illegal mining is out of control. In total, 1 939 serious crime incidents were recorded at Sibanye’s mining operations in South Africa in the fourth quarter of 2022. The cost of these incidents is about R41 million, and this is the situation at just one mining company’s facilities. Forty-nine deaths were recorded across our mines in 2022. While the number of fatalities is down from previous years, South Africa still ranks as the worst country in the world when it comes to mining related fatalities, and it accounts for more than half of the total number of global fatalities recorded last year. Backlogs in the application process for mining rights have stalled mining projects valued at billions of rands.
All of these challenges come at a time when the need for the minerals that will enable the renewable revolution and power the electric vehicles of the future is at an all-time high. “There is no doubt that the exploration potential is here, but the question is, how do we unlock this incredible potential really, really quickly so that we don’t miss out on this massive opportunity?” asked Fortune Mojapelo, CEO at Bushveld Minerals. It really is a massive opportunity: according to Mojapelo, to supply the minerals needed to meet future demand for electric vehicles, for example, we will need something like 400 new mines in the next decade.
“I have no doubt that in 2023, we will see fresh volatility, as well as many, many more surprises,” remarked Duncan Wanblad, Group Chief Executive at Anglo American, during his keynote address. “But I also have no doubt that we will react effectively. As leaders of this vital sector, it is our job not only to build the resilience of our companies and our industry, but also to play a material role in building the resilience and strengthening the capacity of the countries in which we operate.”
Wanblad remains upbeat about the future. “As a miner, I feel that I have to be optimistic. If I look at the situation last year at this time and I look at where we are now, it’s clear that progress is being made,” he said. “It is also very encouraging to see so many people from across the industry coming together and trying to crack some of the hardest nuts that we have to deal with.”
But if Africa is to overcome her challenges, it is clear that there is a lot of work to be done. “The opportunity to further capitalise on our rich mineral endowments is out there. It has been out there for a very long time. With this in mind, I’d like to borrow a phrase from Julius Nyerere: ‘Africa must run while others walk’. Let me say it again, Africa must run while others walk.”
He concluded: “This is going to require the strengthening of partnerships across all stakeholders. We must work together to drive inclusive growth and create a better tomorrow. But we simply cannot afford to walk at a leisurely pace. We’ve got to run and we have to run together.”
— Joanne Carew