The loss of load and the drastic decrease in rail and port capacity have cost billions of mining, but there is a huge opportunity waiting to be seized.
Energy reliability, environmental impact, supply chain issues, lack of technical skills, increasing demand, illegal mining activities, unreliable infrastructure, worker safety and operational security – these are some of the issues facing the South African mining industry. They threaten the industry’s ability to capitalize on countless opportunities and realities that could lead investors to spend their money elsewhere.
During the four-day Investment in African Mining Indaba, these and many other issues were discussed at length, reflecting the somewhat bleak state of the local industry. Mineral Resources and Energy Minister Gwede Mantashe said it would reduce the cost burden on South Africa’s economy by R1 billion per day, and President Cyril Ramaphosa noted that mineral production has contracted by 9% annually by November 2022, a huge amount. part due to the energy crisis. It is estimated that infrastructure inefficiencies have led to a 15% decline in mineral sales.
Damage to Transnet’s rail and port capacity will cost the mining industry R50 billion in lost opportunities in 2022 alone. The poor performance of many mineral exporters cost the railway R35 billion in 2021. In 2022, coal exports through the Richards Bay Coal Terminal fell to around 50 million tonnes – the worst performance through the terminal since 1993.
Illegal mining cannot be controlled. In total, 1 939 incidents of serious crime were recorded at Sibanye’s mining operations in South Africa in the fourth quarter of 2022. The cost of these incidents was estimated at R41 million, and this was at just one of the mining company’s facilities. Forty-nine deaths were recorded in our mines in 2022. While the number of deaths is down from previous years, South Africa is still the worst country in the world when it comes to mine casualties, and accounted 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 these challenges come at a time when the need for minerals that will enable the renewable revolution and power the electric vehicles of the future is very high. “There is no doubt that the exploration potential is here, but the question is, how do we unlock this incredible potential quickly, so that we do not miss this great opportunity?” asks Fortune Mojapelo, CEO at Bushveld Minerals. It’s a big opportunity: according to Mojapelo, to supply the minerals needed to meet the needs of electric vehicles in the future, for example, we need 400 new mines in the next decade.
“I have no doubt that in 2023, we will see new volatility, as well as many other surprises,” said Duncan Wanblad, Group Chief Executive at Anglo American, during his keynote speech. “But I also have no doubt that we will react effectively. As leaders of this important sector, our task is not only to build the resilience of our companies and industries, but also to play an important role in building the resilience and strengthening the capacity of the countries that we do it.
Wanblad remains optimistic about the future. “As a miner, I think 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’s also very encouraging to see so many people from all industries come together and try crack some of the toughest nuts we have to deal with.”
But if Africa is to overcome its challenges, it is clear that there is much work to be done. “The opportunity to make more use of the rich mineral endowment is there. It has been out there for a very long time. With this in mind, I would like to borrow the words of Julius Nyerere: ‘Africa must run when others walk’. Let me say it again, Africa must run when others walk.
He concluded: “This requires the strengthening of partnerships among all stakeholders. We must work together to drive inclusive growth and create a better tomorrow. But we cannot walk casually. We must run and we must walk together.
— Joanne Carew