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The country boasts a wealth of minerals that are critical for the ongoing technology boom and the shift to renewable energy in developed nations and beyond. South Africa is the world’s leading producer of platinum-group metals, accounting for around 70% of global platinum production and 40% of palladium, both of which are vital for catalytic converters, hydrogen fuel cells, electronics, and more.
Moreover, South Africa possesses 70% of the world’s chrome reserves, an essential component used in stainless steel and chemical production, primarily found within the Bushveld Igneous Complex. The nation also ranks among the top producers of manganese globally, holding approximately 40% of the entire world’s reserves.
Other notable minerals include vanadium and nickel, which are crucial in battery technology and energy storage solutions. Recently, the discovery of lithium and coltan—containing niobium and tantalum—has added to the mineral wealth.
Crucial minerals are steering growth in a sector that has encountered multiple obstacles in recent years. In August 2024, Stats SA revealed a modest increase of 0.3% in South Africa’s mining output, largely driven by a 16% rise in manganese and nearly a 25% surge in chromium.
To further capitalize on its mineral resources, South Africa, in partnership with its African neighbors, needs to bolster its beneficiation strategies.
The potential rewards are considerable. President Cyril Ramaphosa has conveyed to investors that through the strategic implementation of value-added projects and capacity expansion, the continent could enhance its GDP by 12% or more by 2050 and create millions of job opportunities.
Africa holds significant reserves of the world’s vital minerals necessary for the energy transition: 55% of cobalt, 47.65% of manganese, 21.6% of natural graphite, 5.9% of copper, 5.6% of nickel, 1% of lithium, and 0.6% of iron ore, according to the UN Conference on Trade and Development (UNCTAD).
However, a unified effort is crucial to controlling the critical minerals value chain, where China currently holds a dominant position. Major initiatives are in progress to address high energy costs, infrastructure hurdles, and to ensure stable policy frameworks. Significant improvements in skills and technology are necessary to close the gap, but advancements are being achieved.
As South Africa establishes itself as a leading automotive manufacturing hub in Africa, developing electric vehicles alongside a battery value chain could open up even more opportunities to leverage the country’s natural resources and competitive advantages.
Breaking away from traditional practices
Despite the considerable potential, most of Africa’s minerals continue to be exported in their raw state, sustaining outdated trade dynamics between Africa and other regions.
The government recognizes that substantial progress must be reinforced by robust policies. South Africa is aware of this necessity and is crafting a strategic framework designed to enhance its critical minerals sector to positively impact development initiatives and diversify its energy sources.
The nation’s abundant mineral resources support its Just Energy Transition Plan, which aims to reduce South Africa’s dependence on coal by fostering its flourishing renewable energy sector.
South Africa is swiftly advancing in the establishment of a green hydrogen industry, guided by its Hydrogen Society Roadmap, which outlines specific goals to be accomplished by 2050. The move to produce and export green hydrogen is backed by the country’s extensive reserves of platinum group metals.
The Green Hydrogen National Programme has attracted over $45 billion in project investments, with about 20% currently in the bankable feasibility stage. The initiative anticipates that global hydrogen demand will more than double by 2030 and increase six-fold by 2050.
The private sector is actively working alongside the government to nurture this industry as mining corporations and other stakeholders aim to decarbonize their activities and work towards establishing Hydrogen Valley, a project focused on creating an integrated ecosystem of green hydrogen hubs throughout the country.
