Blessed by abundant natural resources, Africa’s mining sector has historically been a driving force behind the continent’s economic growth. However, the industry now faces myriad challenges. It is crucial to reflect on the trajectory of the industry and its pivotal role in shaping Africa’s economic landscape, writes Oscar van Antwerpen, founder and director of Minrom Consulting.
Africa boasts abundant resources yet to be explored – from coal, iron, gold, platinum, chromium, manganese and other rare earth minerals – providing the building blocks for the development of economies. Despite the surge in global demand for these minerals, however, the continent’s political uncertainty, outdated policies, regulatory hurdles and degraded infrastructure have caused investors to withdraw from Africa and take their much-needed financing to regions considered more stable.
At the tip of the continent, South Africa sits atop enormous mineral wealth that could reinvigorate the country’s economy and stimulate future growth and development while making a tangible contribution towards sustainability and success on the rest of the continent. The country possesses existing road, rail and port infrastructure, skilled labour and untapped energy sources, and the manufacturing capabilities needed to translate these resources into jobs and prosperity.
As it stands now, however, our mining industry is a shadow of its former self, accounting for just 16% of gross domestic product versus over 40% historically (Minerals Council SA, 2023). In part, disinvestment has been driven by problematic regulations, licensing backlogs and electricity shortages, diminishing investor confidence along with mining’s contribution to GDP.
If current negative trends persist, both the country and the continent stand to lose not just mining profits but also the associated job creation, infrastructure development and community support that mining provides. These losses would be devastating for local economies. But, if we act now to modernise mining policies and demonstrate our commitment to responsible practices, technological innovation and evolving sustainability standards, then the brighter future Africa deserves is still attainable.
Policy reforms for sustainable growth
To revive the mining industry and unlock its full potential, policy changes are urgently needed. Licensing and approvals must be streamlined, and the protection of investments and profit repatriation must be strengthened to attract investment back to South Africa.
Governments across Africa are recognising the need for balanced regulatory frameworks that promote responsible mining while safeguarding local communities’ interests and assuring investors that their assets are secure – but more must be done. Here, we can look to countries like Botswana, Namibia and Rwanda as regulatory frameworks whose transparent and efficient governance processes and mining-friendly policies can serve as models for attracting mining investments for others in the region.
Transparency, ethical practices and community engagement should be integrated into the policy framework to attract investment and stimulate economic growth. Collaboration between industry stakeholders, governments and local communities is crucial for fostering investor confidence, sustainable development and long-term partnerships.
Mining’s role in a low-carbon future
As Africa rapidly urbanises while transitioning to a low-carbon economy, reliable electricity is crucial. While renewable energy is part of the energy mix, it is not enough. Gas and nuclear energy are needed to supplement solar and wind.
While curbing coal usage is crucial for reducing emissions, mining remains essential to produce the materials needed for batteries, solar panels, wind turbines and other renewable infrastructure.
Here, technology is a powerful enabler of change. From autonomous vehicles to advanced data analytics, technology is reshaping exploration, extraction and processing on the continent and elsewhere in the world. Drones equipped with advanced sensors are revolutionising exploration, providing accurate geological data while minimising environmental impact, while artificial intelligence is optimising ore processing, leading to higher yields and reduced energy consumption.
The use of these technologies aids in responsible resource extraction and enhances operational safety, which remains a pressing societal and industry concern. Embracing innovation is not only necessary but a key driver for growth and optimisation. Investors are increasingly attracted to mining projects that leverage cutting-edge technologies, not only to enhance operational efficiency but also better align with sustainable practices.
Sustainability and community empowerment
Sustainability is no longer just a buzzword; it must be considered a fundamental principle guiding the future of mining in Africa. Investors are increasingly prioritising environmentally and socially responsible projects, and mining companies must align their operations with sustainable development goals, ensuring the economic benefits of operations are shared equitably and environmental impacts are minimised, especially in terms of rehabilitation post-closure.
Community engagement and empowerment programmes, responsible water management, ethical resource extraction and reclamation initiatives are integral to responsible mining practices and a sustainable mining future.
Community involvement has long been key to smooth mining operations, but is often overlooked. Minrom has been at the forefront of incorporating these principles into our way of work, recognising the interdependence of economic success and environmental stewardship.
Over the years, we have come to realise the importance of mines integrating environmental rehabilitation into their plans while engaging in constructive community collaboration, fostering realistic local expectations and committing to profit-sharing with local communities – all of which go a long way in creating a social licence to operate.
With proper rehabilitation and an allocation of profits earmarked for the development of local economies, mining can be sustainable and gain community support. For this to work, however, South Africa must invest in a regulatory framework that extends beyond the paper it is printed on – enforcement is needed.
The days of resource extraction without due consideration for environmental and social impacts are becoming relics of the past.
The road ahead
If current negative trajectories persist, I foresee only a handful of South Africa’s mines still operating in five to 10 years’ time. Meanwhile, illegal mining activity will mushroom in the vacuum and manufacturing will continue its decline as mineral inputs dwindle.
We have among the world’s greatest mineral endowments, unmatched geological potential and preferential access to the world’s fastest growing markets. Our continent also has some of the world’s most pressing development needs. With the right policies, investors will return and mining could once again drive double-digit GDP growth and job creation.
Revitalising the mining industry can develop local manufacturing sectors, uplift and diversify entire economies beyond just extraction – when mining thrives, so do supported sectors like construction, equipment supply and downstream manufacturing.
But, most importantly, a thriving mining sector translates to thriving African communities. Mines power ancillary businesses, support health facilities and schools and create millions of direct and indirect jobs across the continent. Unemployment could be reduced and poverty alleviated.
The future of mining in Africa holds both promise and challenges, and requires a multifaceted approach that balances technological advancements with ethical, social and environmental considerations. The industry must adapt to a rapidly changing landscape while prioritising environmental stewardship and social equity. Underpinning this must be a sound, forward-thinking regulatory framework and policy landscape.
With visionary leadership, integrated infrastructure and favourable policies, mining in Africa can catalyse widespread growth and prosperity. With foresight and co-operation, a robust mining industry can help lead the next chapter of Africa’s advancement. By modernising our mining governance frameworks, we can unlock Africa and South Africa’s full mining potential.
The choices made today will shape the industry of tomorrow and determine whether mining lifts all Africans, or benefits only a few. We urgently need continent-wide mining policy reform to attract investment back to Africa, and not just secure the future of the industry but create it. The time for action is now.