actual deliveries are measured against target ); malfunctioning municipalities and the crime and illegal mining prevalence – have had far-reaching and detrimental effects on business confidence and potential investment appetite , which the ailing economy can least afford . 3 These challenges are not peculiar to South Africa , but can be observed in other countries on the continent too .
The median score for Africa on the Investment Attractiveness Index showed a decrease of almost 9 points in 2021 , making it the second least attractive region for mining investment according to miners . In addition , Africa ’ s median PPI ( Poverty Probability Index ) score decreased by almost 1 point . All African jurisdictions , with the exception of Namibia , Tanzania , and Mauritania saw declines in their policy scores . Two African countries – Zimbabwe ( 79th ) and the Democratic Republic of Congo ( 78th ) – ranked in the bottom ten of the survey rankings based on policy . Botswana lost its position as the highest ranked jurisdiction in Africa and was replaced by Morocco , which did not feature in the 2020 survey , but is now the second highest ranked jurisdiction globally based on policy . 4
African resilience Thankfully , in the latter part of the year , face-to-face industry events breathed some life back into the industry after the global pandemic and subsequent exhibition hiatus . Mining in Africa was injected with new energy and investment interest after a successful and rejuvenating Investing in Africa Mining Indaba 2022 in May , where African countries had the opportunity to showcase positive , investor-friendly changes in policy and ESG ( Environment , Social and Governance ) goals . Similarly , southern Africa ’ s biggest mining , electrical , automation , manufacturing , power and transport trade exhibition hit Johannesburg in September . Mining minds were re-ignited with solution driven business alliances for suppliers and enduses alike . African Mining ’ s sister company , MTE ( Mining and Technical Exhibitions ), also pulled off 24 successful travelling exhibitions , including expos in Botswana and Zambia , to deliver new innovations where industry is thriving .
Despite the major local and global challenges , South Africa ’ s mining sector delivered a performance which exceeded expectations on most fronts on the back of high rand commodity prices , per the PwC ’ s SA Mine 2022 report released in October 2022 . 5
A realistic transition for the future A global low-carbon energy agenda remains a key focus , and this is anticipated to result in increased demand for a number of commodities . Global constraints in supply of these commodities will mean increased prices and a need for investment in supply . When looking at a ‘ Just Transition ’ away from fossil fuels , the pace of this is likely to be limited by the availability of resources needed for the transition . Here , understanding the supply constraints will be key to mapping a realistic transition for the future , noted the PwC .
“ In South Africa , we stand to benefit from the demand growth , but whether South Africa and other resource-rich countries will benefit to the full extent will depend on their ability to address bottlenecks in supply and mine to market infrastructure . There is an obvious need to invest in the right skills , infrastructure , energy and water and in general , to create an enabling environment for exploration , mine development , production and sales . Realising the full potential benefit of our resources and creating long-term sustainable outcomes will depend on our ability to mine cost competitively and to integrate various value chains profitably ,” said Andries Roussouw , PwC Africa ’ s Africa Energy , Utilities and Resources leader . 5
Opportunities in green energy Despite local , regional and global challenges , the mining sectors in Africa continue to be a main driver in the region ’ s economies , if not the backbone to many . The biggest underlying driver and opportunity for transformation lies in the green energy transition . 6
Miners have an opportunity to emerge as leaders in a critical transition : 1 . Net zero and the energy transition will drive demand for metals . Miners must therefore carefully consider their position in the race to net zero and exposure to critical minerals .
2 . With an increase in profits , miners have never been better placed to take advantage of their financial strength and the new opportunities and ensure sustained outcomes .
3 . Gold deals still dominate globally , but critical minerals deals are gaining momentum – miners should revisit their deals strategy .
4 . ESG remains a key pressure point , but also an opportunity – miners should double down on ESG .
Paul Bendall , PwC Global Leader , Mining & Metals , said , “ Only by developing and maintaining trust with a broad range of stakeholders will miners ’ social licence to operate be assured . The successful development and execution of ESG strategies will go a long way to securing that trust .” 7
Trust is a precious commodity , building it will continue to secure the future of the mining industry , African economies , and ultimately , the communities that depend on them .
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Despite local , regional and global challenges , the mining sectors in Africa continue to be a main driver in the region ’ s economies , if not the backbone to many .
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References :
1 . Mine report 2022 | Press release ( pwc . co . za )
2 and 4 . Annual-survey-of-mining-companies-2021 . pdf Annual Survey of Mining Companies , 2021 ranks 77 jurisdictions worldwide . It was sent to approximately 2 200 exploration , development , and other mining-related companies around the world . The survey was conducted from August 23rd to November 19th , 2021 . The companies that participated in the survey reported exploration spending of USD2.51-billion in 2021 and USD1.79- billion in 2019 . The 2021 results from the Permit Times for Mining Exploration publication are also included in the survey .
3 . Go to our daily news page on www . africanmining . co . za to see further developments on the South African front with comment from the Minerals Council South Africa on the Medium-Term Budget Policy Speech delivered by finance minister , Enoch Godongwana , on Wednesday 26 October . Mentioned : Government ’ s positive fiscal consolidation , future doubling of capital expenditure , and its highly conditional financial support of key state-owned entities that are constraining economic growth ; disappointment with no firm government decision to increase private-sector access to Transnet ’ s rail and port infrastructure , which could unlock an estimated R151-billion of mineral exports and that government seems resolute to increase carbon taxes steeply after 2023 . 5 . SA Mine 2022 ( 14th edition ) ( pwc . co . za ) 6 . deloitte-au-global-tracking-the-trends-2022-digital020222 . pdf 7 . Global Mine report 2022 | Press release ( pwc . co . za )
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