MINING

OVERVIEW The U.S. construction equipment sector exports to South Africa from 2011 to 2015 were over 600 percent higher than the next largest African market, Egypt (this sector includes construction, earthmoving, and mining equipment). Overall, regional sector Africa growth since 2013 was relatively flat; regional export performance, however, mirrored overall global developments and have declined sharply since 2015. The challenges in the mining industry, such as high input costs, environmental, health and safety regulations, a fluctuating exchange rate, and logistic inefficiencies have been partially offset in 2020 by the recovery in commodity prices, most notably Platinum Group Metals (PGM) The structural malaise in the mining sector has been aggravated by uncertainty regarding Government intentions on mining rights, and investors remain cautious.  However, it is a major supplier of Platinum Group Metals (PGM), coal, iron, manganese, chrome, and nickel. It also has certain Rare Earth Element (REE) deposits and related specialty refining infrastructure. Sub-Sector Best Prospects The South African mining industry is well-developed and sophisticated. Many local equipment and service providers as well as organized events exist to facilitate the distribution of goods or services into the African continent. South Africa remains an important steppingstone to develop that area. U.S. goods and services in the following fields are well represented in South Africa: Software Furnaces Drill Rigs Automation Mining Processing GIS Mapping Communications Systems Materials Extraction and Handling Technology Opportunities Mining and related projects have traditionally been responsible for significant infrastructure development. For example, 2,200 miles of railway line, three new ports and a large amount of bulk handling infrastructure at other ports remain in planning stages of both the South African Government and mining consortia. Increasing the efficiency of material handling systems is high on the agenda of exporters of ores and minerals. Mining contributes about eight percent to the gross domestic product (GDP) of South Africa from a high of 20 percent in the early 1990’s.  The industry has been in decline for more than two decades due to structural issues, including: 1) the need for policy certainty; 2) clarity on environmental issues such as the carbon tax; 3) the regulatory framework; 4) infrastructure issues including electricity, ports, and railroads; and 5) security issues.  Production and sales in the first quarter of 2021 showed year-on-year growth however, thanks to strong demand from world commodity markets.  The Department of Mineral Resources and Energy (DMRE) is working to spur exploration by streamlining the licensing regime to address a backlog of 5,000 exploration license applications in an effort grow South Africa’s share of global exploration dollars from one to five percent in five years.  The DMRE issued an RFP for on June 1 for a new online mining system to register mining rights applications. South Africa’s national mineral research organization Mintek is seeking foreign government and private sector investment to help fund the creation of critical minerals processing infrastructure and the development of clean technologies.  The most promising proposals center around the development of a processing facility for rare earth elements (REE) sourced from across the Southern Africa region, the production of high-grade battery materials, and the development of a hydrogen fuel cell manufacturing industry.  South Africa already provides significant quantities of nine of the 35 critical minerals the U.S. Secretary of the Interior identified as key components of “economically significant applications” in the United States and the country holds 91 percent of the world’s reserves of platinum group metals (PGMs), which are vital in hydrogen fuel cell manufacturing Recent mining infrastructure plans include: Saldanha Bay iron and steel ore bulk export hub. Coega Port infrastructure development focused on the creation of a dedicated rail line for the export of manganese from the Northern Cape and the creation of a chorine plant. Further enhanced bulk material handling systems at the port of Richards Bay. Resources Mining Weekly Publication Minerals Council South Africa Exhibitions Mining Indaba 2022 Africa Mining Investment Conference and Exhibition February 2022 CTICC, Cape Town www.miningindaba.com