Mantashe, mining and the state: A dangerous turn in policy - Patrick McLaughlin

Key topics:State control undermines private investment in mining and energyMRDB centralises power, stifling innovation and investor confidenceSANPC and BEE policies deter exploration and fuel infrastructure revival.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Patrick McLaughlin.The appointment of Gwede Mantashe to oversee South Africa’s energy and mining portfolio has proven to be one of the most consequential decisions in the ANC’s recent history. With a commanding hand over the Department of Mineral Resources and Energy (DMRE), Mantashe’s influence stretches from the crumbling remains of PetroSA to grandiose ambitions for state-controlled mineral and petroleum entities. His legacy, already cemented in policy missteps, deepens further with the introduction of the 2025 Mineral Resources Development Bill (MRDB).State Control and Entrepreneurial DestructionAt the heart of Mantashe’s mining vision lies a fundamental misunderstanding of risk and entrepreneurship. Instead of embracing private sector investment and market-driven strategies, he imagines a world where the state—funded by taxpayers—bears the costs and reaps the profits. The result is the transformation of resource-rich portfolios into politically inspired fiefdoms, where cadre deployment and ANC ideological goals override investor confidence.The MRDB continues this trajectory. By removing ministerial discretion only to transfer control into yet more administrative mechanisms, the ANC erodes what little space is left for innovation and private capital. Risk-taking in mineral exploration, once the hallmark of successful mining economies, is now stifled under bureaucratic weight and political interference.Petroleum Fantasies and the SANPC ModelThe creation of the South African National Petroleum Company (SANPC) marks another worrying turn. Pasted together from PetroSA’s remnants, SANPC appears destined to replicate the failures of the past. Promises of revived GTL operations, offshore exploration (such as the failed Shell Garden Route venture), and LNG imports from Mozambique have gone nowhere. Yet the Minister continues to promote the illusion of progress.As with the mining industry, Mantashe’s petroleum agenda reflects his preference for centralised control, state dominance, and little technical or economic transparency. The same flawed logic—where state control equals success—threatens to undermine the petroleum supply chain, driving away the very private sector partnerships needed to revive South Africa’s crumbling fuel infrastructure.BEE, Bureaucracy and Mining Investment ParalysisMantashe’s application of Broad-Based Black Economic Empowerment (BEE) policies has become a central obstacle to exploration and investment. By enforcing rigid empowerment quotas even at the geological study and feasibility stages—when no revenue exists—he has rendered South Africa uncompetitive. After a fight with the Minerals Council, South Africa, he finally relaxed on BEE for prospecting and exploration, as if that helps. Investor flight is therefore no longer a theoretical concern but a documented reality.Mining executives have decried the sluggishness of DMRE’s application processes, the inaccessibility of modern cadastral systems, and the endless BEE “hoops” required just to initiate activity. These complaints were echoed recently in parliamentary hearings, where Mantashe’s department was accused of having “killed all mining investment.” Conflict with Industry VoicesMantashe’s strained relationship with the Minerals Council—representing over 90% of mining investment—is no secret. While Council leaders push for transparency, digital systems, and investor-friendly frameworks, Mantashe doubles down on Soviet-era command models.The Council’s warning that “bureaucracy and hostility” are deterring global mining firms has fallen on deaf ears. So, too, have calls to separate the mining and energy portfolios to allow focused leadership on each. The response from DMRE has been more centralisation and more ideological rhetoric.Mining as a Diverse, High-Stakes IndustryWhat policymakers in the ANC appear not to grasp is the complexity of the mining value chain. It is not simply digging and shipping; it includes exploration, complex geotechnical surveying, deep capital investment, refining, processing, logistics, export management, and downstream trade. Global players enter this market because of scale and return—both of which are now compromised in South Africa.Moreover, the rise of critical minerals—platinum group metals, rare earths, and green economy inputs—means that South Africa’s mining potential could play a global strategic role. But instead of being nurtured, it is being strangled by ideology.Conclusion – A System in DeclineGwede Mantashe’s track record reveals an entrenched belief in state control, a dismissiveness of investor concerns, and a preference for political patronage over economic reality. His stewardship of the DMRE is not only economically damaging but constitutionally dangerous.South Africa’s mining and energy sectors are too important to be left to ideological experiments. The MRDB should not be viewed in isolation but as part of a larger campaign to centralise control and replace entrepreneurial drive with political decree. It is a strategy that has failed before—and will fail again—unless the business sector and Parliament push back firmly.The time to act is now.

Mantashe, mining and the state: A dangerous turn in policy - Patrick McLaughlin

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