South Africa could unlock almost R100bn of investment by the mining industry if it cleared the red tape holding back the new mining and renewable energy projects the industry has planned.
Minerals Council SA (The Council) estimates that R30bn of capital projects are waiting for regulatory approvals, with a backlog of 4,500 outstanding mining and prospecting licences at the Department of Mineral Resources and Energy preventing them from going ahead.
The Council’s CEO, Roger Baxter, was briefing journalists on Monday at the start of the Investing in African Mining Indaba.
Baxter also said mining companies have now committed to 4GW renewable energy projects worth R65bn in new investment. However, it takes 18 months to get the environmental and other approvals required to get projects registered and ready to go. The Council is working with the government to try to fast-track the process.
South Africa has plummeted to the bottom 10 rankings on the latest Fraser Institute survey, which measures 84 jurisdictions on their attractiveness as destinations for mining investment. Baxter said that no South African mining companies had been surveyed by the Fraser Institute. Those surveyed are primarily exploration companies, however, and South Africa has few of these.
Baxter said South Africa’s ranking was unfair, but that South Africa’s ranking would still be in the bottom half of the index, given the regulatory and infrastructural barriers to investment in SA mining.
Though South Africa has benefited from the global commodities boom, and the industry is one of the few to record an increase in employment, mining output is still slightly below pre-Covid levels and investment in mining has stagnated for most of the past decade.
Mining accounts for about 8.6% of SA’s GDP and employs 458,000 people, according to the Council’s Facts and Figures document published on Monday.