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The Citizen
a day ago
- Business
- The Citizen
SA's shrinking mining sector and the policies that brought us here
Mining is now officially in recession after two quarters of declining output. The minister's answer to this is more ministerial control … Mineral Resources and Energy Minister Gwede Mantashe's latest bill 'recycles tired and failed transformation policies'. Mineral Resources and Energy Minister Gwede Mantashe's latest bill 'recycles tired and failed transformation policies'. Picture: Gallo Images/Jeffrey Abrahams After two quarters of declining production, mining is now officially in recession. The once mining-heavy JSE now hosts just 35 mining companies, seven of which have no operations at all in South Africa. In 1987, there were more than 600 listings on the JSE, with mining accounting for more than half of them. This was the engine that powered the industrialisation of SA. Mining houses such as Anglo American and AngloGold Ashanti have fled SA, body and soul. Some such as Lonmin quietly exited, and nearly all have diversified abroad. Glencore is suspending operations at two plants in the Glencore-Merafe Chrome Venture, citing high electricity prices, logistics challenges with Transnet rail and ports, and a downturn in the global ferrochrome market. This comes at a cost of billions of rands in export earnings and highlights the potential difficulties of promoting minerals beneficiation when electricity prices have shot up 700% in the last decade. ALSO READ: Mining fails to deliver jobs to local communities How far have we slipped? South African mining production today is 10% below where it was a decade ago and 20% lower than 20 years ago, notes Izak Odendaal, chief investment strategist at Old Mutual Multi-Managers. This is reflected in the chart below. Source: LSEG Datastream, Old Mutual Multi-Managers Part of this can be pinned on declining commodity prices, but the longer-term trend points to something deeper and more troubling: a regulatory regime hostile to investment. 'The truth is that SA mining is uninvestible,' says Paul Miller, CEO of AramanthCX. 'Since the early 2000s we've had multiple mining charters, and people comb over the details, but that's irrelevant. 'The trajectory remains the same – mining companies will be called on to give up more and more of their financial returns over time – and that will not change. This is what makes it uninvestible.' Mineral Resources and Energy Minister Gwede Mantashe has said he wants SA to regain the 5% global exploration budgets we enjoyed in the early 2000s, but perhaps he should aim first for only 1%. In 2024, SA claimed just 0.8% of global exploration spending, compared to Australia's 15.9% and Canada's 19.8%. Any recovery in mining investment starts with exploration, which typically has a 10- to 15-year lead time before generating cash. Exploration is high risk, with no guarantee of a return. Exploration companies have complained that besides the business risks, they are also required to take BEE partners on board. This graph from S&P Capital IQ shows the steady de-ranking of SA mining exploration in global terms: Source: S&P Capital IQ ALSO READ: SA opened 159 new mines in five years, creating over 15 000 jobs Think bigger, think billions The Industrial Development Corporation and the Department of Mineral Resources and Energy announced a R400 million fund to support exploration by junior miners, but what's needed is more than R10 billion if we are to get back to 5% of global exploration. We're nowhere near that. Mantashe's latest attempt to 'fix' the mining sector is the Draft Mineral Resources Development Bill, which was released last month for public comment, with the purported aim of enhancing regulatory certainty, streamlining processes, and boosting investor confidence. It has been met with predictable outrage and will likely achieve none of these goals. It recycles tired and failed transformation policies. For a start, it reintroduces the requirement for ministerial consent for any change to the shareholding of mining companies, including foreign-listed ones. It's hard to imagine any foreign mining company putting SA on its priority list when the minister gets to decide on shareholder changes. Section 11 of the Mineral and Petroleum Resources Development Act (MPRDA) deals with changes in ownership. ALSO READ: Mining production disappoints again Ministerial approval looms large The vague language of the draft bill provides little clarity on whether an Australian miner with SA interests is required to seek ministerial approval for changes in the group shareholding, which in turn would impact the ownership of the local subsidiary. This was decided in favour of the minister in the Supreme Court of Appeal in 2023 when it was ruled that any change in control, direct or indirect, requires ministerial consent. 'The change, if implemented, would prevent pledges of shares, the introduction of preference shares and any change in shareholding at all for a non-listed mining company without ministerial consent,' says Bowmans Attorneys. Perhaps the biggest objection to the draft bill is that it mandates BEE for prospecting and mining rights, when all prior indications were that this would be omitted. 'The draft bill is not altogether optimal. We did have engagements with the department, but we cannot see where our inputs were taken into consideration,' says Mzila Mthenjane, CEO of Minerals Council SA. The draft bill then introduces a new beneficiation section to the MPRDA, requiring every producer to make minerals or mineral products available for local beneficiation. This means mining companies must offer a portion of their output for processing in SA rather than exporting raw minerals. The bill grants the minister expanded rights to set terms and conditions for beneficiation, including oversight of beneficiation processes and approval of beneficiation plans. Given the department's notorious bureaucratic somnolence, it's hard to imagine this setting the mining sector alight with enthusiasm. Beneficiation is energy-intensive, and little thought seems to have been given to the realities of forcing miners to add value locally when electricity prices have screamed up 700% in the last decade. No draft regulations were released with the bill, so the industry can't assess the full impact. Another change introduced in the bill allows the minister to designate certain areas for small-scale and artisanal mining by blacks. This would have to be approached carefully, says Bowmans, to avoid fronting and irregular practices at both the departmental and community level. ALSO READ: 'If they don't give us money, let's not give them minerals': Mantashe hits back at Trump funding cut Industry trying to stay afloat Is there a way to turn this ship around? Odendaal says there is. Increased mining production and exports require the following, among other things: Capital for exploration, feasibility, and construction; A conducive and predictable regulatory regime; A working public repository of mining rights and geological information (cadastre) – this is finally and belatedly being implemented; Stable labour relations; Safety and security; Community buy-in – unlike other businesses, mines cannot choose where to operate; and Water, energy, and logistics infrastructure – letting mining companies run their own trains would be a good start. Adds Miller: 'A new generation of reforming politicians will have to make the root and branch changes required to fix our mining sector, and it will have to be done on the wreckage of the existing system.' This article was republished from Moneyweb. Read the original here.
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:
The South African
19-05-2025
- Business
- The South African
Gwede Mantashe steps in as acting president
President Cyril Ramaphosa has designated Minister of Mineral Resources and Energy, Gwede Mantashe, as Acting President of the Republic. This temporary appointment comes as both President Ramaphosa and Deputy President Paul Mashatile undertake simultaneous Working Visits abroad. President Ramaphosa left for the United States and will arrive in Washington, DC, later today, 19 May 2025. Deputy President Mashatile is currently on a separate visit to the Republic of France. President Ramaphosa's trip to Washington includes high-level engagements aimed at strengthening diplomatic and economic relations between South Africa and the United States. Among the highlights of the visit is a scheduled meeting to discuss bilateral cooperation, trade, and global peace and security matters. Officials view the visit as a strategic opportunity to deepen ties between the two nations and foster collaboration within multilateral platforms such as the G20 and BRICS. According to SABC News , the South African delegation plans to address international concerns and misperceptions, reaffirming the country's commitment to democratic principles, human rights, and constructive global engagement. Let us know by leaving a comment below or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X, and Bluesky for the latest news.
IOL News
18-05-2025
- Politics
- IOL News
Mantashes accused of using political links for personal or familial gain
Mineral Resources and Energy Minister Gwede Mantashe, and his son, Buyambo who was appointed to be part of the SETA boards. The powerful Mantashe family is once again under the public microscope, following revelations that Buyambo Mantashe, son of ANC National Chairperson and Minister of Mineral Resources and Energy, Gwede Mantashe, was appointed chairperson of a Services Sector Education and Training Authority (Seta) board. The leak of a list of Seta appointments triggered a political storm in Parliament, with opposition parties questioning the legitimacy and transparency of the process. Members of the uMkhonto weSizwe (MK) Party and the Economic Freedom Fighters (EFF) led the charge against Higher Education Minister Nobuhle Nkabane, demanding clarity on how the appointments were made. Critics claimed the process smacked of favouritism, pointing to Buyambo's appointment as indicative of the ANC's alleged practice of rewarding insiders and politically connected individuals. The controversy deepened when Zakhele Buthelezi, another new appointee, prematurely introduced himself to a parliamentary committee as the chairperson of the Construction Education and Training Authority (Ceta), even though Parliament had not been formally notified. The confusion sparked outrage among MPs, who raised concerns about procedural irregularities and the broader credibility of the appointments. Facing mounting pressure, Minister Nkabane ultimately withdrew Buyambo Mantashe's appointment. This is not the first time the Mantashe family has faced allegations of using political connections for personal or familial gain. In 2021, a News24 investigation known as 'The Eskom Files' reported that Gwede Mantashe's daughter, Nombasa Mantashe Mawela, received funds linked to kickbacks involving Eskom suppliers during the Kusile Power Station project. The payments were allegedly funnelled through former Eskom executive Frans Hlakudi and were tied to a poultry venture associated with Mawela.
IOL News
16-05-2025
- Politics
- IOL News
ANC supports Nkabane's withdrawal of controversial SETA board appointments
Buyambo Mantashe, son of Mineral Resources and Energy Minister Gwede Mantashe, was among the figures named in the scrapped SETA board appointments. Image: Supplied The African National Congress (ANC) is standing behind a decision to withdraw and re-open the appointment process of SETA Board chairpersons following a wave of criticism over current post appointments. IOL previously reported that the appointments included Gwede Mantashe's son, Buyambo and former KwaZulu-Natal premier Dr Nomusa Dube-Ncube. The appointments came to light following concerns from the Democratic Alliance (DA). The party then wrote to the Higher Education Portfolio Committee chairperson, demanding answers on the matter. Furthermore, during a heated parliamentary session on Wednesday, Economic Freedom Fighters (EFF) MP Sihle Lonzi was forcibly removed after questioning Mantashe's appointment to the Manufacturing, Engineering and Related Services SETA (MERSETA) board. "Following broader consultations with stakeholders in the post-school education and training sector and their counsel regarding the appointment of the chairpersons of the boards of SETAs, I have decided to recalibrate the process – which was overseen by an independent panel," Nkabane said in a statement. She has called on relevant constituencies to nominate new candidates and committed to ensuring that appointments are made in line with the Skills Development Act. "I have taken the decision to withdraw previous appointments in response to public concerns. Further, I take this decision in the interest of good governance and transparency, to ensure accountability in the appointment process," she said. Meanwhile, the ANC, which has previously been silent about alleged nepotism among members, said it "welcomes and fully supports' Nkabane's move in response to public concerns. ANC national spokesperson, Mahlengi Bhengu-Motsiri, said the move is a principled act and a reaffirmation of the party's commitment to ethical governance, democratic accountability and institutional integrity. 'It is precisely the kind of leadership envisioned in our programme of organisational renewal — responsive, transparent, and anchored in public service, not personal entitlement,' she said. 'It was a decision of conscience and accountability, made by a minister committed to transparency and good governance.' 'Our deployee has reassured the ANC, the minister, that the recalibrated process will be conducted in a manner that is fair, transparent, and fully compliant with the Skills Development Act,' Bengu-Motsiri said. She said the party is satisfied that all due diligence will be observed during recruitment, and that all candidates will be appointed in accordance with the principles of merit, representative, good governance, and public accountability. 'As a movement, we remain committed to ensuring that such critical public processes reflect the highest standards of ethical leadership and institutional integrity.' 'Minister Nkabane's commitment to merit, transformation, and clean administration reflects the ANC's foundational values of discipline, service, and responsibility.' Nkabane also said the process will be reopened via a Government Gazette calling for nominations for a period of seven days. A new independent panel will be established to review nominations and make recommendations. She said the new process would prioritise merit, competencies and relevant experience, while ensuring balanced representation in terms of race, gender, youth and persons with disabilities. All candidates will be subject to screening and vetting. 'In the interest of transparency and good governance, I feel it is necessary to present the data on the qualifications of previously recommended board chairs," she said. Of the 20 previously recommended candidates, three held doctoral degrees (NQF Level 10), at least 15 held master's degrees (NQF Level 9), and two were medical doctors. Their expertise spanned engineering, accountancy, law, medicine and governance. "It is my intention to present new board chairs in the shortest time possible," Nkabane added. 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 ✕ The ANC, however, said the decision to publish a new Gazette and open nominations reinforces public participation, not party-political spectacle. 'As the ANC, we call on all sectors of society, especially progressive voices in business, labour, academia and civil society — to participate in the renewed process and nominate candidates who reflect the ethos of public service, transformation and national development.' Bengu-Motsiri said the party will not be lectured on accountability by those who have no respect for democratic institutions, who turn every policy question into a populist outburst, and who offer critique without responsibility. 'What we have witnessed is not their victory; it is the maturity and discipline of ANC-led governance on full display,' she said. Among the withdrawn appointments were: Buyambo Mantashe – Chairperson, MERSETA board (son of Minister Gwede Mantashe) Dr Nomusa Dube-Ncube – Chairperson, BANKSETA board (former KZN premier) Siboniso Mbhele – Appointee to the TETA board (head of KZN Department of Transport) Loyiso Masuku – Appointee to the FOODBEV board (ANC deputy regional secretary, Johannesburg) IOL Politics
