6 Ways South Africa is Boosting the Critical Minerals Industry

South Africa’s vast reserves of critical minerals present a huge opportunity for the country to accelerate economic growth and boost employment creation while ensuring the energy transition is just and inclusive.

In this regard, the South African government has implemented a number of measures aimed at scaling-up investment, increasing exploration and production while optimizing the entire mineral value chain.

Increasing Mineral Exploration

As part of efforts to address the decline in minerals production – with January 2023 marking the twelfth consecutive month-to-month decline – South Africa’s Department of Mineral Resources and Energy (DMRE) unveiled a large-scale exploration campaign targeting discoveries and the opening up of new mining sites in the North West, Limpopo and Northern Cape Province. According to Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, the exploration campaign forms part of efforts by the DMRE to increase the production of critical minerals essential for the energy transition.

“We are doing this because we are convinced that this is the new mining belt for our country where new mines can be opened on the back of the discovery of new minerals that have been proven to be critical for a just energy transition.”

Formation of R500 Million Exploration Fund

In line with the country’s local content strategy, which aims to empower marginalized black-led and local junior mining projects, the DMRE, in partnership with the Industrial Development Corporation and the Council for Geosciences, unveiled a R500 million fund aimed at providing funding to local and artisanal miners to conduct exploration and production activities. The initiative is expected to increase minerals produced by small-scale mining projects.

“New mines can be opened on the back of the discovery of new minerals that have been proven to be critical for a just energy transition”

Digitalization of Licensing System

To improve the efficiency and transparency of the license application, grant and management processes, the DMRE seeks to digitize and modernize its mining license system. On 24 March 2023, the department issued a request for bids for the development of a customized and digital mining license platform which will enable the ministry to enhance the accuracy and accessibility of industry data while reducing the time spent in assessing and approving mining applications. This in turn is expected to speed up the deployment of mining projects and to increase production.

Revitalizing Transportation Industry and Infrastructure

While challenges associated with South Africa’s rail network have negatively impacted the country’s mining sector and the ability for mining firms to move goods and services, a new partnership between mining industry employer organization, Minerals Council South Africa – which includes mining giants such as Anglo American, De Beers, Gold Fields and Harmony Gold – and state-owned rail and ports operator, Transnet, is set to stabilize and improve South Africa’s rail network and port infrastructure and operations, thereby strengthening mineral trade.

Ensuring Secure Power Supply

Currently, inadequate power supply is costing the South African economy approximately R1 billion a day and disrupting mining operations. As such, the DMRE has adopted various measures aimed at boosting energy reliability at mining sites and across the national grid. Through the Integrated Resource Plan 2019 and by removing the licensing threshold for independent power producers, an increasing number of mining firms are deploying power projects for security of supply. Seriti is deploying wind and solar projects to power its Mpumalanga and Grootegeluk mining operations, respectively, while Gold Fields implemented a R715 million solar facility to power its South Deep mine near Johannesburg. The DMRE is also procuring 513 MW of energy storage capacity as part of the Battery Energy Storage Capacity Bid Window as well as new renewables capacity from independents under the Renewable Independent Power Producer program.

African Critical Minerals Summit

In a bid to showcase investment and partnership opportunities within South Africa’s mineral sector, the DMRE will host the first-ever African Critical Minerals Summit, a platform dedicated to increasing investment and spurring development across the regional critical minerals value chain. Organized by event producer Energy Capital & Power in partnership with the African Energy Chamber, the summit will launch on Friday the 14^th April in Sandton. The event will take place in November 2023, uniting African policymakers and companies with global investors to discuss the future of Africa’s mining industry and the energy-mineral nexus. Through high-level panel discussions, exclusive networking sessions and deal signings, the African Critical Minerals Summit is where the African energy transition will be accelerated.