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Daily Maverick
15-07-2025
- Business
- Daily Maverick
SA's critical minerals strategy a shopping list to revive existing carbon-intensive mining economy
South Africa's recently released critical minerals and metals strategy continues to prop up carbon-intensive processing and manufacturing activities, while giving a nod to greener minerals and green hydrogen as future endeavours. Following successive pronouncements by South African Mineral and Petroleum Resources Minister Gwede Mantashe on the need to leverage the country's critical minerals, the ministry recently published its national Critical Minerals and Metals Strategy. Mantashe has been vocal in criticising developed countries for defining 'critical minerals' to serve their own interests, and in February this year, threatened to withhold access to these minerals from the US if it limited funding. At the time, he called on African countries to embrace their strategic mineral advantage and take charge of growing demand. The South African critical minerals strategy seeks to do just that, by charting a roadmap that leverages these resources to the nation's benefit, while simultaneously driving growth, job creation and industrial development. Its stated intention is to focus on the entire value chain, with a view to growing the country's existing industrial base while improving value addition. The draft is sensitive to geopolitical tensions and trade restrictions and positions itself in that context, identifying the need to anchor the country as a supplier of critical minerals globally in the context of growing demand for certain minerals. Similar to many African countries, South Africa's value chains are primarily upstream, with a focus on extraction and export and little beneficiation and value addition. Like its neighbours, for example, Zimbabwe and Namibia, the country wants to take steps to localise beneficiation and processing. Carbon-intensive processing However, the strategy is less focused on leveraging minerals for the low-carbon transition and related green technologies, unlike the recently finalised African Union Green Mineral Strategy. Instead, it continues to prop up existing carbon-intensive processing and manufacturing activities, while giving a nod to the need to pursue greener minerals and green hydrogen as future endeavours. Noting the difference between a 'green mineral' and 'critical mineral' strategy, the one published by the ministry is very much the latter. This follows a unilateral view of what counts as a 'critical mineral', which Mantashe has previously stressed should be something that a country decides for itself. In the words of the strategy, critical minerals are those which are 'critical for South Africa'. This is seen to include 'minerals that are strategically important for economic growth, industrial development, job creation and national security', measured through economic potential, supply risks and risk of supply disruptions. In the strategy, this translates into a list of 21 minerals and metals (some of which are not strictly speaking either), which fall on a continuum of 'highly' critical to 'moderately' critical to the country. Sitting in the highly critical list are coal and iron ore, both extremely carbon-intensive input materials, grouped with minerals and metals well known for their green transition value, such as chrome and platinum. Lower on the list are gold, copper and aluminium, coupled with rare earth metals, cobalt, and uranium. This classification clearly illustrates that although there are differing interpretations of what a 'critical mineral' is, the South African approach is by no means linked to forward-looking technologies or a low-carbon transition. Coal Instead, it presents as a lengthy shopping list of measures across a broad spectrum of mined resources to revive South Africa's existing minerals economy, including sectors that have fared poorly in recent times, such as gold. South Africa is not alone in designating coal a critical 'mineral'. US President Donald Trump earlier this year issued the 'Reinvigorating America's Beautiful Clean Coal Industry' executive order. This designation of coal is contrary to the forward-looking and globally driven critical minerals environment, which the strategy itself acknowledges is primarily driven by the renewable energy transition, geopolitical dynamics, technological advancements and international trade policies and standards. The latter would include the EU's Carbon Border Adjustment Mechanism (CBAM) that penalises carbon-intensive goods and services. The strategy also seeks to position the country as a regional hub for critical minerals' processing and beneficiation, as well as battery manufacturing, and underscores the importance of working with other countries in the region. Regional coordination However, notwithstanding comments around the difficulties of nationalism and unilateral action, it does not meaningfully address how South Africa intends to work with its neighbouring partners to jointly benefit from their respective strategic advantages and what role these other countries might play. This is something the African Continental Free Trade Agreement (AfCTA) could play a role in facilitating and supplementing, as it provides for the progressive elimination of tariffs on mining-related goods and services between members. The strategy then pans to other sectors such as hydrogen and fuel cell manufacturing, revitalising the ferro-alloys sector through various incentives and stimulus measures, trade measures to support the local steel industry, a handful of measures to stimulate electric vehicle manufacturing, and steps to develop a downstream industry for titanium. The measures are detailed and considered and build on or echo previous initiatives that have sought to revitalise these aspects of the economy. For example, the focus on batteries and fuel cells to support new energy vehicles (e-mobility) in the Just Energy Transition Implementation Plan and Electric Vehicle White Paper. The basics To work, however, South Africa will first need to ensure it gets the basics right. Minerals and metals have little value if they can't get to the ports or national processing facilities; if there is no power to process or utilise them; or if the ports are non-functional or congested. This has been a challenge over the past decade that has brought the South African mining sector to its knees. The strategy acknowledges this, but offers little more than reiterating the need to deepen existing efforts (Operation Vulindlela) to support port, energy and rail infrastructure and to create special zones, support initiatives, infrastructure finance and energy conservation measures. The strategy is laudable for the many measures and interventions it seeks to introduce or build on to further grow the sector, but given the breadth of its scope, and the legacy challenges that beset the industry, it will need a comprehensive implementation plan with sufficient financial backing and political will to get it off the ground. This may be the hardest part of all. Similarly, if it is to overcome the nationalistic trade tendencies and geopolitical tensions to become the regional hub it promotes, it will need to develop a much clearer strategy with neighbouring countries so that each can profit from their relative advantages. DM Olivia Rumble is a consultant to Enzi Ijayo Africa Initiative and a director at Climate Legal. Leezola Zongwe is a researcher at Enzi Ijayo, specialising in critical minerals and energy policy.
IOL News
29-05-2025
- Business
- IOL News
Criticism of South Africa's new Mineral Resources Bill: A disaster in the making?
Sharp criticisms have emerged over the structure of the new Mineral Resources Bill that was gazetted for public comment last week by Minister of Mineral and Petroleum Resources Gwede Mantashe Image: Reuters Sharp criticisms have emerged over the structure of the new Mineral Resources Bill that was gazetted for public comment last week by Minister of Mineral and Petroleum Resources Gwede Mantashe with the DA on Wednesday saying, "The new minerals bill is a disaster in the making." This comes hot on the heels of the Minerals Council on Tuesday saying its contributions were not incorporated. Mantashe and other government officials hope that the Mineral Resources Development Bill and the Critical Minerals and Metals Strategy blueprint will help to shore up mineral exploration, spearhead SA's production of critical minerals and attract international investment into the mining sector. 'The bill is poorly thought out. It is contradictory and unclear in several places. It grants new powers to the Minister to rule the industry according to his own whim,' said James Lorimer, the DA's spokesperson on mining issues. He further said the bill will 'end the already tottering case for foreign investment' in the mining sector. Among the stipulations that the DA is opposed to is a provision requiring ministerial approval for the change of control of any listed company holding a mining licence. Lorimer also voiced out concerns over a 'vague requirement that certain minerals would have to be made available for local beneficiation' adding that there was no clarity over 'who would do the beneficiation or at what price' mines would have to make the minerals available. Mzila Mthenjane, the CEO of the Minerals Council, said the published bill 'does not reflect inputs' from the grouping of SA's mining sector players. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 'The draft bill is not altogether optimal,' said Mthenjane, adding that an industry preference seeking that the legislation 'specifically exclude prospecting companies from empowerment' had not been included. 'Exploration is the highest risk part of the mineral value chain and imposes an unnecessary burden on prospectors who must sink every rand into drilling and data interpretation. Yet in this draft bill, none of that is included,' he explained. Lili Nupen, a mining policy expert who founded Johannesburg-based NSDV, told Business Report though that the bill's effectiveness will be hinged on how it is implemented. 'NSDV Law is of the view that the South African mining industry stands to benefit from the implementation of the Mineral Resources Development Bill and the Critical Minerals Strategy, if they are executed effectively and supported by consistent policy implementation,' said Nupen. She added that the Mineral Resources Bill was supposed to be representative of the South African government's recognition of investor concerns and, therefore, should be a mechanism of reforming the legal framework that governs the mining sector to address concerns. 'For example, the alignment of the mining and environmental regulatory timeframes and processes, as well as their acceleration, is directly aimed at addressing current concerns regarding the backlog of the processing and authorisation of mining projects. Similarly, the Critical Minerals Strategy provides much-needed clarity on South Africa's mineral priorities, which could guide investment decisions and support coordinated development efforts.' South Africa, a major mining hub in the region, has identified platinum, manganese, iron ore, coal, and chrome ore as 'high-critical minerals' under the new Critical Minerals and Metals Strategy.
Eyewitness News
21-05-2025
- Business
- Eyewitness News
Mantashe says deal on SA minerals unlikely to be on the table as Ramaphosa meets Trump
Nokukhanya Mntambo 21 May 2025 | 6:45 Gwede Mantashe Cyril Ramaphosa Donald Trump Minister of Mineral Resources and Energy, Gwede Mantashe. Picture: @GovernmentZA/X JOHANNESBURG - Minerals and Petroleum Resources Minister, Gwede Mantashe, said a deal on the country's critical minerals is unlikely to be on the table at the Oval Office when President Cyril Ramaphosa meets with his United States (US) counterpart, Donald Trump. Mantashe, who is also the acting president in Ramaphosa's absence, briefed the media on the Critical Minerals and Metals Strategy in Cape Town on Tuesday. This is part of what the government says is a broader tactic to tighten the policy framework for the critical minerals sector and streamline regulations. Africa is said to hold 30% of the world's critical mineral reserves, such as manganese, graphite, nickel, lithium and copper. The US relies on South African metals and minerals that are essential for its economy and national security, making metals and minerals the biggest South African exports to the US. According to the Institute for Global Dialogue, in 2021, platinum group metals were almost half of South Africa's exports to the US, and nearly 100% of the US's global chromium supply. When Trump slapped the world with higher import tariffs, he put gold, platinum group metals, copper, and zinc on a list of exemptions. Some economists said SA's minerals could be the Trump card the country needs at the negotiating table when diplomats talk trade and race policies in Washington. But Mantashe said otherwise. 'I would imagine that the US would try to put the issue of minerals on the table, but I doubt if the South African delegation will commit South Africa on its minerals. They may have issues, but that will have to come back for a discussion in the country. 'Any decision on that front will have to involve us, it will have to involve the Mineral Council, labour, and then we can make proposals. But our emphasis remains, our critical minerals must be enriched close to the place of production and that delegation in the US understands that fully,' added Mantashe. That aside, there are also semantics involved with calls for a new definition on critical minerals - one that differentiates between what is genuinely vital to a country, and what is just something of importance. ALSO READ:
