Critical minerals, critical moment: South Africa is losing the race to supply the world

Key topics:SA has vast critical minerals but mining output and exploration are declining.Poor governance and slow licensing deter investment and job creation.Reliable infrastructure and energy are needed for industrial-scale processing..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..By Jacob Lazarus-Fried.South Africa faces a fleeting opportunity: to become a trusted supplier of the critical minerals that the world needs to power the next generation of technologies. The US and EU are scrambling to secure the metals underpinning AI, advanced manufacturing, defence systems, batteries and the green transition. Brussels expects demand for critical minerals to double by 2030, while global lithium consumption jumped nearly 30% in 2024. Nickel, cobalt, graphite and rare earths rose 6–8% last year, driven largely by clean-energy technologies.So who is meeting this demand? China. It combines substantial domestic deposits with overwhelming dominance in refining, controlling processing for 19 of the world’s 20 key minerals. Western governments are urgently seeking suppliers who are not dependent on Beijing. SA should be at the top of that list. We should mine more of our critical minerals and do so reliably, expanding domestic processing as conditions allow..Read more:.Mantashe, Froneman clash publicly on how to offer US access to SA’s critical minerals.SA’s geology is unusually broad. It hosts world-class deposits of platinum-group metals (PGMs), manganese, vanadium, chromium and rare earths, a combination few jurisdictions can match, backed by decades of mining expertise. Dominant PGM reserves support hydrogen and advanced manufacturing, manganese underpins EV batteries, and high-grade rare-earth deposits extend this advantage into defence and advanced tech.And yet SA is falling behind. By Q1 2025, the Minerals Council reported total mining production down about 5% year-on-year, with PGMs the worst performer at -- 12.7%.Nor is new supply being prepared. SA’s share of Africa’s exploration budget has fallen from about 35% in the 2000s to roughly 7% in 2024, while active PGM shafts have dropped from 81 in 2008 to just 53 today. Exploration, the riskiest stage of mining, is blocked by multi-year-delayed and discretionary licensing. The result is predictable: not just fewer discoveries today, but a smaller mining sector in the next decade.Even if output recovers, SA struggles to process even mature industrial metals at scale. The continent has only one stainless-steel plant of meaningful size. Without energy security and industrial capacity, value addition is unreliable, and Western talk of diversified critical-mineral supply chains remains rhetorical.Our failure to score an open goal reflects structural weaknesses in the state after three decades of ANC rule: poor governance and collapsing infrastructure. Under Gwede Mantashe’s tenure as Minister of Mineral and Petroleum Resources, these failures have been managed rather than fixed, with regulatory drift hardening into a system that exists mainly to stall investment.Our licensing regime is slow, opaque and corruption-prone. Rights applications take years to resolve. The long-delayed mining cadastre named a preferred bidder only in early 2024, leaving thousands of applications unresolved and billions of rands in projects frozen. Constantly shifting BEE rules inject uncertainty into assets that must operate for decades, driving investors elsewhere. As exploration dries up, so does the skills pipeline. A country with SA’s geology should be training hundreds of mining geologists each year; instead, regulatory paralysis is hollowing out investment and jobs. With unemployment at 31.9%, this failure is agonising.What is required is not radical: rules that can be understood and trusted. Mining rights should be granted or refused within fixed time limits, by officials insulated from political interference. The present system of shifting BEE targets should be replaced with one that judges outcomes rather than paper compliance: how many people are employed, what skills are transferred, and how much labour is local. That is how poverty is reduced without choking growth.Governance failures extend beyond mining regulation to foreign policy; partners are watching. Critical minerals are now treated as strategic inputs for defence and industrial policy, not ordinary commodities. A government that leans rhetorically toward BRICS while straining relations with Western capitals cannot assume Washington, Brussels or Tokyo will view it as a stable pillar of their critical-minerals strategies.SA does not need to ‘pick a side’ between BRICS and the West to be a credible critical-minerals supplier. Rather than aligning with a bloc we could define, clearly and consistently, the conditions under which our resources are developed. Those conditions should be explicit: local labour, fair working standards, local procurement, manageable debt exposure and transparent ownership rules. Neutrality is leverage.Even with regulatory reform, execution is decisive. Transnet’s rail and port systems are failing, costing roughly R140 billion in lost coal and iron-ore exports between 2021 and 2023. Investors will not commit capital unless goods reach ports reliably, which requires genuine private participation—starting with the 25-year Durban Container Terminal Pier 2 concession and third-party freight operators across all 41 approved routes.Energy security is equally binding. Energy-intensive mineral processing cannot expand if firms fear blackouts. Eskom remains a politically entangled monopoly with a long record of corruption and must be unbundled into generation, transmission and distribution, with strong support for Independent Power Producers..Read more:.How poor governance has caused SA’s unemployment crisis: Ann Bernstein.Anyone who claims that foreign investment amounts to neo-colonialism misses SA’s most pressing reality: jobs. Voters consistently rank unemployment as the country’s most urgent problem. Mining is not only a direct employer; at scale, it anchors downstream industries and local supply chains. Call it what you like—without foreign capital, these projects do not happen.The risk of environmental harm is real, but manageable. SA has strict environmental laws and compulsory impact assessments. Courts are willing to step in when rules are breached, as the Shell Wild Coast case showed. But laws require credible enforcement. If rare-earth mining expands, Parliament may well need to refine existing regulations to account for the specific risks posed. As the global race for critical minerals accelerates, the world will not wait for us. The barriers to mining are familiar, but the cost of inaction is not. Our advantage lies in the ground. Leaving it unextracted would be a failure of the government.

Critical minerals, critical moment: South Africa is losing the race to supply the world

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