South Africa is renewing its frontier status as a mining exploration destination, with the production of many minerals expected to surge as the world shifts to renewable energy and decarbonisation.
Mineral Resources and Energy Minister Gwede Mantashe said yesterday at the opening of the Mining Indaba in Cape Town – the world’s biggest mining conference – that South Africa’s exploration landscape is becoming more fertile following recent discoveries of world-class deposits of minerals for the future such as lithium, rare earth minerals, copper, nickel as well as the expansion of mineral systems of manganese fields of high-grade quality.
A theme fast emerging at the Mining Indaba this year is the many opportunities arising from the substantial additional mineral resources that will be required as the world transitions towards renewable energy and decarbonisation.
For instance, Khalid bin Saleh Al-Mudaife, Saudi Arabia’s vice-president of energy and mineral resources for minerals affairs, told the indaba delegates that without substantial additional mineral mining, there won’t be an energy transition… “It’s as easy as that”.
José Fernandez, the US Under-Secretary of the State Department for economic growth, energy and the environment, said the pace of renewable energy adoption was growing faster than anticipated, and estimates were that mineral production required by the renewable energy sector would have to grow by factors of between four and six times by 2030. For example, graphite production would have to rise 42-fold by 2040.
Mantashe said the recent discoveries of these minerals in South Africa “provide a solid base for industries of the future as well as the balanced energy security sought by the country, the region, and the world. This is the result of our deliberate investments in geo-mapping through the Council for Geoscience (GCS)”, he said.
He said CGS’s coverage had systematically expanded to 11.4% from below 5%, when the programme started a few years ago.
To increase junior mining and the emergence of new mines in South Africa, the government had partnered with the Industrial Development Corporation (IDC) to create a R500 million exploration fund. This fund would be supported with geological information to de-risk the exploration activities.
In response to a question about the seeming dearth of new mining investment in South Africa currently, Mantashe said there was rising investment in the coal mining sector, particularly smaller open-pit coal mines, as well as open-pit mining for manganese. There was also some investment in the platinum group mining.
He admitted though that the levels of investment were far from various other periods in South Africa’s history, where large numbers of new gold mining shafts formed part of the economic landscape of the country.
Mantashe said the government’s immediate focus was to resolve load shedding through improving the energy availability through power station maintenance, procurement of emergency power from existing facilities and private power plants, buying more electricity from neighbouring countries and improving skills capacity at Eskom.
He said load shedding cost the local economy R1 billion a day and had been the major factor behind a 9% reduction in mining production in South Africa in November, the 10th consecutive month of mining production decline – although mining groups were benefiting from high metals commodity prices.
“At the centre of our energy challenges is the decline in the energy availability factor (EAF) from an estimated 75% to 49%. The most feasible and logical option to resolve load shedding is by arresting the decline in the EAF,” Mantashe said.
Mantashe said, however, in a briefing that there had so far been “no rush” of private sector companies making electricity power available to alleviate load shedding, and though the government had heard there may be 9MW of this power “in the pipeline”, there was no certainty this would materialise.
He said the government expected to be able to source up to 100MW of additional power from neighbouring countries, primarily from energy projects being developed in Mozambique and also Zambia.
He said the global energy crisis also negatively impacted mining in 2022. For instance, the price of crude oil averaged $100 (about R1 761) per barrel in 2022, which forced mining companies to pay high fuel and electricity prices.
He cited Goldfields as an example that had taken advantage of government reforms on embedded generation, and were able to increase production by 10% by generating much of their own electricity through solar power, while industry production had slipped by almost the same percentage.
He said local mining groups were losing out in the commodity price boom because of logistical bottlenecks, and that joint structures had been established by Transnet and the Minerals Council South Africa (MCSA) to address the problems.
He said the South African mining industry recorded 49 fatalities in 2022, the lowest ever number of fatalities recorded in history, representing a 34% improvement year-on-year compared to 74 fatalities recorded in 2021. “This is a milestone, not a target that must be acknowledged and communicated by the industry,” he said.
Mantashe said there had also been no mine disaster in the past three years – with a mine disaster defined as a mining incident that results in more than five fatalities.
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