Sizing Up Mining Exploration In South Africa

Over the years, the South African mining industry has been in a state of decline. Policy and regulatory uncertainty, labour disputes and climate concerns have all contributed to an overall inhospitable environment, and statistics from the Minerals Council South Africa show that in 2017, South Africa accounted for a ‘dismal’ 1% of total global exploration expenditure (as compared to 14% for Canada, 14% for Australia, and 13% for the rest of Africa).

Despite such unfriendly terrain, there is still a chance for the country’s resources sector to spring back, with gains in commodity prices this year bringing the industry back into profitability. Minerals Council SA says South African mining investment could almost double in the next four years, provided the country returns to the top quartiles of the most attractive mining investment destinations. To achieve this, exploration in the country needs to see a resurgence, and turning attention to new materials could be the way forward.

A hopeful industry

Globally, greenfield exploration has experienced a significant dip, with the majority of efforts centred around existing projects. With this trend echoed in South Africa, the country’s reputation on the global stage is – according to PwC South Africa partner Andries Rossouw- that of a mature mining sector with limited exploration potential. However, he believes this perception can be altered.

“South Africa as an exploration destination has a lot going for it in terms of existing infrastructure and sound judicial and financial systems,” says Rossouw. “The regulatory environment, although still with certain uncertainties, has improved since two years ago with much better interaction between the industry and regulators.”

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