The South African mining industry stands at a critical juncture, with its potential to drive economic growth and development hanging in the balance. Key stakeholders are sounding the alarm, emphasising that the industry's ability to play a meaningful and positive role in the country's economy hinges on urgent and extensive structural reforms in the energy and logistics sectors.Mzila Mthenjane, CEO of the Minerals Council, underscores the significant role expected of the mining sector, not only within South Africa but across the African continent, highlighting the sector’s significant contributions to GDP and employment.However, persistent challenges, including energy shortages and logistical bottlenecks, have hindered its growth and competitiveness on the global stage. Speaking in Cape Town recently Mthenjane warned that without swift action to address these systemic issues, the industry's prospects for sustainable success remained bleak.Minister of Mineral Resources and Energy Gwede Mantashe said 2023 had proven to be a tough year for the local mining industry due to a myriad of international and domestic factors.“High energy prices, high inf lation, lower commodity prices, coupled with load-shedding and logistical bottlenecks continued to put pressure on operational costs and thus constrained to a bare minimum the mining industry’s contribution to our economy,” he said, indicating that government was investing not only efforts but also resources to resolve these bottlenecks through the National Energy and Logistics Crisis Committees comprising the private and public sectors. Also, President Cyril Ramaphosa has spoken out saying energy and logistics needs to be addressed for mining to thrive.“We are all acutely aware that we face strong headwinds, and a number of persistent challenges are impeding mining performance. Globally, commodity price volatility, high energy prices, geopolitical tensions and a global cost of living crisis are playing a significant role in dampening the business operating environment,” he said. “Domestically, the energy crisis and port and rail bottlenecks are putting serious pressure on miners’ operational costs. Illicit mining, cable theft and infrastructure vandalism place a further strain on mining output and returns.”According to Mthenjane, it is imperative to stabilise performance at the country’s ports and its rail network. Load-shedding and the lack of electricity has seen mining houses actively seeking to reduce their exposure to Eskom in recent years.Another fast-developing concern was the lack of water in the country, said Mthenjane, with the mining sector now increasingly working towards finding solutions to repair, maintain and build water reticulation systems in the regions in which they operate.
Hamstrung industry sounds the alarm
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