JOHANNESBURG (miningweekly.com) – South Africa is at a pivotal juncture. It can choose to remain a supplier of raw commodities that enrich other countries or become a global leader in mineral‑based industries, says globally rated metals and mining analyst and portfolio manager, Shamim Mansoor, who spoke to Mining Weekly in a Zoom interview.

By focusing on mineral-based beneficiation, South Africa can transform its economy and solve this country’s financial problems, Mansoor, who has her own consultancy business specialising in metals and mining, asserts. (Also  watch attached Creamer Media video).

“Beneficiation is not just an economic strategy – it’s a national imperative to turn the wealth in the ground into wealth for our population,” she says.

The value addition envisaged includes turning platinum into hydrogen fuel cells, manganese into battery materials, iron-ore into steel, coal into chemicals, and chrome into stainless steel. But such value addition can only be realised with the support of reliable logistics, affordable and reliable energy, and efficient licensing.

“These are critical to us monetising our mineral endowment and unlocking value for the people of South Africa, who continue to struggle.  

“We need both government and business to step up and collaborate on the optimal solution,” says Mansoor while noting that mining has always been the bedrock of the South African economy, contributing to the country’s GDP, and driving industrialisation, socioeconomic growth and job creation.

Data published by Minerals Council South Africa for the nine months to 30 September 2025 highlights, she points out, that:

• Mining contributed 5.8% of total nominal GDP, estimated at R439-billion.
• Mineral ores and related exports contributed approximately 52% of the value of overall South African exports.
• Mining contributed more than R100-billion to the national fiscus in the form of corporate taxes, royalties, VAT payments, and through personal income tax payments by mining sector employees.
• The mining sector provided direct employment to an average of 469 765 people. This represented about 4.5% of total formal sector employment.

But while mining is economically crucial, its competitiveness is constrained by rapidly increasing power tariffs, underperforming rail and ports services and bottlenecks in the licensing system.

Mansoor recalls that at this month's Investing in African Mining Indaba, Eskom CEO Dan Marokane stated that Eskom now has over 98% coverage in terms of supply and demand but the exorbitant electricity cost (over 900% increase since 2008) has led to more than a dozen smelters shutting down in recent years leading to significant job losses.

“In January, the National Energy Regulator of South Africa approved a 35% reduction in electricity tariffs for 12 months for Samancor and Glencore Merafe smelters. But mining by nature is electricity intensive and I believe this reduction in tariffs needs to be approved for all smelting and refining processes across the industry as ferrochrome is not the only affected process. But it begs the question how these cuts will be funded and is this sustainable.

“Michelle Phillips, Transnet CEO, highlighted at the Mining Indaba that Transnet continues to face issues with asset reliability and funding. It has applied for government funding and has engaged in public-private partnerships but in her words, Transnet still has a long way to go.

“In my view, whether we look at Eskom or Transnet, the issue boils down to funding. Can government step in or does there need to be public-private partnerships? I believe these two options are not mutually exclusive. We need both government and business to step up and collaborate on the optimal solution.”

MINERAL EXPLORATION

Another significant challenge, Mansoor points out, is the long-anticipated cadastral system.

“Our Minister of Mineral and Petroleum Resources, Gwede Mantashe, admitted at the Mining Indaba that it is still in a pilot phase. Only 358 prospecting rights and 32 mining rights were granted in the past year.

“In my opinion, this has contributed to the decline of South Africa’s share of global exploration investment which collapsed from about 5% two decades ago to less than 1% currently, reflecting a dramatic loss of investor confidence.

“In 2007, South Africa had approximately $403-million of African exploration capital, but by 2024 this had declined to approximately $121-million, underlining how much the industry has contracted,” Mansoor adds.

Mining Weekly: Can critical minerals be the catalyst for the turnaround of the industry?

Mansoor: South Africa’s mineral wealth is undeniable. But wealth in the ground does not translate into wealth for the people of South Africa. South Africa is poised to play a major role in green energy development globally but we must act strategically to develop the necessary infrastructure and downstream industries. South Africa has 92% of the world’s platinum group metals reserves, 36% of the world’s chrome resources and 54% of the world’s manganese is found in South Africa, Gabon, Ghana and Côte d’Ivoire. However, in terms of refined supply of metals by top producing regions in 2025, South Africa only featured in platinum because most of our minerals are being exported as raw materials, which limits our ability to contribute to the expansion and diversification of our economy. In my view, mineral beneficiation must extend as close as possible to point of production so that South Africa can put an end to the export of wealth from communities that are in significant need of it. This is the reason behind countries like DRC, Namibia, Zimbabwe and Indonesia introducing export bans on raw ores to push for more in-country mineral processing. By focusing on beneficiation, turning platinum into hydrogen fuel cells, manganese into battery materials, iron-ore into steel, coal into chemicals, and chrome into stainless steel, South Africa can transform its economy and solve the country’s financial problems. I believe we are at a pivotal juncture. We have a choice to make: remain a supplier of raw commodities thereby enriching other countries or become a global leader in mineral‑based industries. Beneficiation is not just an economic strategy – it is a national imperative to turn the wealth in the ground into wealth for our population. In my opinion, to achieve this, we require reliable logistics, energy reliability and affordability, and an efficient licensing system. These are critical to us monetising our mineral endowment and unlocking value for the people of South Africa, who continue to struggle.