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DUDUZILE RAMELA: Let’s delve into the mining sector. The year 2025 has witnessed an increase in global demand for key minerals, volatile commodity prices, and evolving regulatory frameworks across Africa’s mining landscape.
Today, the Minerals Council of South Africa released its Facts and Figures Pocketbook, providing a thorough analysis of the sector’s performance this year.
Bongani Motsa, the acting chief economist at the South African Minerals Council, joins us to shed more light on this research. Thank you for joining us on Moneyweb@Midday.
Could you share your overall evaluation of the report, highlighting the highs and lows of the South African mining sector?
BONGANI MOTSA: Thank you for having me, Dudu. It’s a mixed scenario indeed. For example, platinum group metals (PGMs) and gold are experiencing impressive price movements.
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However, despite these price spikes, production volumes for these commodities haven’t significantly increased. Normally, rising prices boost production, but that’s not what’s happening now. In contrast, chrome and manganese have demonstrated considerable growth, albeit from a very low baseline.
It’s also worth mentioning that employment has risen by 2,000 as of Q3 2025.
Lastly, in terms of exports, our complete data for 2025 indicates that export earnings are a billion rand lower than what we achieved in 2024. I will pause here for now.
DUDUZILE RAMELA: On the domestic front, the mining sector is estimated to have contributed approximately R439.2 billion to the nation’s GDP. That’s quite promising.
BONGANI MOTSA: Indeed, Dudu. When viewed in the larger context of our contribution to the fiscal system, this figure is noteworthy.
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As economists, we focus on genuine figures. Excluding the price influence, the sector continues to lag behind its potential.
DUDUZILE RAMELA: What factors are hindering or constraining that potential?
BONGANI MOTSA: Various factors play a role.
Since 2007, we have been grappling with electricity shortages and considerable increases in electricity tariffs that have outstripped CPI inflation.
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Logistical constraints from Transnet have presented further hurdles; these issues began in 2015 and hit a peak during the Covid pandemic. Currently, Transnet is still striving to recover in terms of rail and port efficiency.
Additionally, the regulatory environment holds significant importance.
Miners require a stable and predictable policy and regulatory environment. The ongoing changes we have seen in South Africa are troubling.
This volatility is not beneficial for mining investments. A more stable atmosphere would motivate mining to achieve its full potential.
Listen/read: Can South Africa’s mining sector adjust to the Just Energy Transition?
Moreover, exploration is a vital component. In the early 2000s, South Africa was responsible for about 5% of global exploration expenditures. Now, we account for only around 0.6%.
The Minerals Council asserts that exploration involves inherent risks, and investments do not guarantee returns. For instance, pouring R100 million into exploration doesn’t ensure you’ll get R100 million back.
We believe that the government could assist by offering incentives for exploration.
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This strategy has yielded success in countries like Canada and Australia, both renowned mining territories.
Nevertheless, despite having top-tier mineral resources, South Africa has not fully tapped into its exploration potential, which could greatly improve industry performance.
DUDUZILE RAMELA: From what you’ve outlined, it seems we are facing a complex situation, particularly regarding critical minerals. As a nation, we are keen to place more emphasis on the value chain and downstream effects of these minerals.
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However, it seems certain conditions must be satisfied. In this competitive arena for critical minerals, are we ready to meet the demand?
BONGANI MOTSA: In some respects, yes. We possess the mineral resources, especially in the Northern Cape, as you might be aware. However, more exploration is essential. Furthermore, our rail and electricity infrastructure in that region require substantial improvements.
Creating a business case solely based on potential can be very challenging.
Especially for Transnet to invest in rail infrastructure when the business foundation remains uncertain.
Additionally, concerning critical minerals, we must place a significant emphasis on developing local industries capable of adding value to the minerals rather than merely exporting them in raw form.
We must acknowledge the primary challenge facing South Africa: energy is crucial.
We should identify critical minerals that can assist with our energy challenges, from generation to transmission—and even distribution. Embracing a value chain approach is vital.
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DUDUZILE RAMELA: You are attending the Mining Indaba, which begins today. It appears that your primary focus will be on exploration, as current exploration levels are not meeting expectations. Is exploration indeed the main theme at this year’s Mining Indaba?
BONGANI MOTSA: Yes, it’s a primary topic among others we’re addressing.
Since 2018, the Minerals Council has highlighted that unlocking exploration is essential for industry growth.
We are also addressing the broader policy and regulatory landscape, advocating for stable policies and regulations that promote investment, not just in mining but across all sectors.
We need investment-friendly policies.
Attracting not only foreign investments but also leveraging the $1.8 trillion in private sector savings available can create opportunities.
I’ve discussed exploration, the regulatory framework, and now I’d like to draw attention to our focus on electricity.
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We are disappointed to find that Nersa (National Energy Regulator of South Africa) has approved a regulatory asset base (RAB) for Eskom, resulting in an average electricity tariff increase of 8% this year and next.
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This situation undermines our global competitiveness in key export sectors such as mining and manufacturing.
DUDUZILE RAMELA: Thank you for your insights today, Bongani Motsa, acting chief economist at the Minerals Council of South Africa.
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