South Africa’s mineral resources are the lifeblood of the economy. Without urgent policy interventions to revitalise the mining industry, the country’s entire economy will wither, like a gold rush town fallen into decay.

The mining industry is struggling, but it is far from dead. South Africa is the world’s leading producer of platinum, vanadium, vermiculite, manganese and chromium. It is the second largest producer of ilmenite, industrial garnet, palladium, rutile and zirconium. It is also the world's third largest coal exporter, and a large producer of iron ore.

Other significant minerals produced by South Africa include gold, titanium, nickel, antimony, phosphates, rare earth elements, uranium, diamonds, tin and copper.

It is ranked second in Africa and 21st in the world for mineral potential in the Fraser Institute’s most recent survey of mining companies, assuming that its policy regime followed ‘best practices’. This is, perhaps, not surprising when it sits on R35-trillion in mineral reserves, one of the richest non-oil resource bounties in the world.

South Africa’s policy regime does not follow best practices, however. Uncertainty created by years’ worth of delays in proposed amendments to the Mineral and Petroleum Resources Development Act (MPRDA), which established the state as the custodian of all mineral rights, and by the predatory ambitions and dramatic legal wrangling about the terms of a new Mining Charter for the industry, has hit investment sentiment hard.

This is compounded by widespread perceptions of cronyism, corruption, and inefficient administration of mining licences. Other factors in the socio-political environment also weigh heavily on investors’ feelings towards South Africa’s mining industry.

Report by the Institute of Race Relations