JOHANNESBURG (miningweekly.com) – If South Africa wants to reclaim its position in the global mining industry, half-measures just won’t cut it. The Department of Mineral and Petroleum Resources (DMPR) needs to go beyond admitting administrative failure and must actively restore trust, says mining luminary Paul Miller, the CEO of AmaranthCX.

“This means having a fully transparent cadastre, open-access geological data, strict enforcement of exploration obligations, and limit the discretion exercised by political activists masquerading as public officials.

“Investor confidence depends on an efficient, predictable and fair system, not a bureaucracy manipulated for personal and political interests. Politicians must make policy, and officials must implement that policy in an even-handed way.

“South Africa’s mining decline was not inevitable, it was a choice. For two decades, the government chose secrecy over transparency, bureaucracy over efficiency, and political favouritism over competence. It wasted its geological wealth through negligence, mismanagement, and sheer administrative failure,” Miller points out.

Now, South Africa faces the uncomfortable truth of the rest of the world having possibly moved on.

“The question is no longer whether South Africa can fix its mining sector; the question is whether investors will ever trust it again,” cautions Miller, who does point out, however, that some investors are still persisting, particularly in copper in the Northern Cape, and also in lithium, uranium, rare earths and mineral sands.

But in the main, the mining sector being the economic flywheel it once was has past, with major mining companies focusing largely on ‘stay-in-business’ and sustaining capital investments, rather than greenfield projects.

South Africa was once the undisputed leader in African mining. It had the geology, the skills, and the infrastructure to dominate the continent for generations.

Yet today, its share of Africa’s exploration budget, a forward-looking indicator of future success, has fallen from 35% two decades ago to about 7% today.

Meanwhile, countries with fewer resources but better governance—like Namibia, Botswana, Côte d’Ivoire and even Malawi—are attracting investment.

'WANTS' OUTLINED

At the Investing in African Mining Indaba in February, Minerals Council South Africa CEO Mzila Mthenjane outlined what is wanted for the South African mining industry to be able to play a strong and competitive game “and win for the nation of Mzansi”.

“We want a regulatory environment that encourages local and foreign investment into our prospecting sector, which for the past four years has attracted less than 1% of global exploration spending.

“With a vibrant exploration portfolio, we see an enduring, sustainable mining industry that changes the fate of many people, lifting them from continued unemployment, poverty and hunger to dignity and pride because of the wealth that mining can create,” Mthenjane pointed out.

“We want provisions for exploration companies in the DMPR’s review of the Mineral and Petroleum Resources Development Act (MPRDA), that are fit for purpose for prospecting, junior, midtier and major mining companies, encouraging investment through business-friendly laws.

“We want the expected and timely introduction of a modern, transparent mining cadastre that will bring South Africa level with other mining jurisdictions in terms of efficiency of licensing to urgently manage the backlog of unprocessed prospecting and mining right applications, and to speedily process and issue new applications without contestation and court cases, effectively removing perceptions of malfeasance.

“An investment-friendly exploration environment will encourage the creation of prospecting funds from the private sector, broadening the options for access to finance and opening further opportunities for new entrants to complement the funding from government that is granted on a conditional basis and excludes a broad range of newcomers.

“We want government departments to be aligned and to streamline various aspects of approving prospecting and mining applications. The creation of a one-stop shop for investors to expedite exploration and mining projects is critical.

“A holistic approach from a fully functional regulator, with skills and capacity to manage the sector is equally essential to align on the needs and performance of the industry, address the speed at which decisions are made and to strengthen the trust between the DMPR and the industry.

“We want a process with the DMPR, which much like Operation Vulindlela, will focus attention on three or four key constraints on investment and growth in the mining industry, and to collaboratively work on fixing them as a matter of urgency,” Mthenjane detailed.

The MPRDA has not achieved its growth goal, even though mining is the most transformed of South Africa’s economic sectors.