O nce the flywheel of South Africa’s economy, the mining sector is now in decline. Investor flight, regulatory chaos, and policy failures are driving capital elsewhere —leaving the country’s mining future at risk.
South Africa was once the undisputed leader in African mining. It had the geology, the skills, and the infrastructure to dominate the continent for generations. Yet today, the country is no longer a top contender for new mining investment. Its share of Africa’s exploration budget, a forward-looking indicator of future success, has collapsed from 35% two decades ago to about 7% today. Meanwhile, countries with fewer resources but better governance—like Namibia, Botswana, Côte d’Ivoire and even Malawi—are attracting investment.
This decline is not the result of bad luck or unfavourable market conditions. It is the direct outcome of regulatory failure, policy uncertainty, and administrative chaos.
For years, the Department of Mineral Resources and Energy—now split into the Department of Mineral and Petroleum Resources (DMR) and the Department of Electricity and Energy—has been engaged in a sustained exercise of mismanagement and obfuscation. It has driven away investors, issued thousands of prospecting rights while simultaneously strangling actual mineral exploration, and squandered opportunities at a staggering scale. Now, after more than a decade of denial, the department has finally admitted the extent of the crisis and is scrambling to implement reforms. But the damage has already been done.
For years, the DMR insisted that its SAMRAD mineral rights system was functioning just fine, despite overwhelming evidence to the contrary. Investors, mining companies, and industry analysts knew the truth: the system was a disaster. Licences were lost in a bureaucratic morass, applications took years to process, and amendments or renewals of existing rights could take even longer. Corruption flourished in the shadows of administrative opacity.
South Africa soon developed a reputation as one of the hardest places in Africa to get an exploration or mining licence. Many investors simply gave up trying.
New dawn?
Only recently – after more than a decade of deflection – has the DMR finally admitted the scale of the administrative shambles.
To its credit, it has begun publishing details of the permitting backlog and has contracted a service provider to develop and implement a new online cadastral system. This is a welcome but shamefully overdue step. While other African countries implemented modern cadastral systems years ago, South Africa stubbornly clung to its paper-based chaos, ensuring that a generation of mining and exploration investment was lost.
Even now, questions remain. Will the new system be implemented competently? Will it be free of corruption? And most importantly, will the department finally allow full transparency in mineral rights data, as is standard practice in every serious mining jurisdiction? The industry has heard promises before, and similar assurances are bound to be repeated at this year’s Mining Indaba, an annual conference in Cape Town.
South Africa has lost two decades of new geological knowledge that could have been used to attract investment, support new discoveries, and develop the industry
Another long-overdue development is the Council for Geoscience’s launch of an online geological data portal. For years, South Africa’s geological data was hoarded, inaccessible, or simply lost.
Exploration companies rely on historic geological data to assess potential exploration targets. Without it, investment dries up, and exploration activity collapses. Countries that understand this – like Botswana and Namibia – have made their geological data freely and easily accessible online, attracting investors in the process.
South Africa, by contrast, spent two decades locking its data away, or charging prohibitive fees to access it, ensuring that new discoveries would be made elsewhere.
But the real scandal is not just the failure to share data – it’s the data that has been lost entirely. Under the Mineral and Petroleum Resources Development Act, companies that receive prospecting rights are legally required to implement the approved prospecting work program and submit their exploration results to the department. It is unlawful to award prospecting rights to parties that have neither the skills nor the resources to implement the approved prospecting work program. Alas, this has been all too common.
This data should have been compiled, stored, and – upon expiry of the prospecting right –shared by the Council for Geoscience (CGS) to help future explorers build on earlier work. Instead, for 20 years, thousands of prospecting rights were granted, and many were never implemented, meaning no exploration took place at all.
Some were implemented but without compliance, meaning companies never submitted their exploration data, either due to negligence or because they knew there was no enforcement. Others submitted their data only for it to be lost in the department’s paperwork disaster, meaning even if companies followed the law, their findings likely vanished into the bureaucratic abyss.
The consequence is that South Africa has lost two decades of new geological knowledge that could have been used to attract investment, support new discoveries, and develop the industry. This is a failure of administration, not policy. This is a tragedy of governance, not geology.
Systemic failure
While the department’s failures are glaring, they do not exist in isolation. South Africa’s mining decline is part of a broader governance collapse.
Investors looking at the country don’t just see a hostile and administratively incompetent mining department, they see a failing electricity supply and a dysfunctional bulk logistics network making mining operations unreliable and uncompetitive. They see ongoing labour and community unrest. They see mining companies ever increasing social obligations, with shifting regulations that create more risk. They see a government refusing to let go of policies that have demonstrably failed.
These factors combine to ensure that South Africa is perceived as one of the least attractive mining jurisdictions in not only Africa, but in the world.
While major mining companies including Anglo American, Sibanye-Stillwater, and Glencore continue to operate in South Africa, none of their boards of directors are committing new growth capital to the country. Their recent capital expenditures have been entirely focused on ‘stay-in-business’ and sustaining capital investments, rather than expansion or greenfield projects.
This distinction is critical: investors are willing to maintain existing assets, including ensuring their own energy security to offset Eskom’s failure, but they are unwilling to take a larger bet on South Africa’s future. A mining jurisdiction that cannot attract significant growth capital is a mining jurisdiction in decline. A handful of second-tier collieries or small open-pit chrome and manganese mines does not change this reality. These are not the large-scale investments that indicate long-term confidence in South Africa’s mining sector.
Last chance saloon
Now, the government is scrambling to change course. But investors have long memories.
They know that every country is entitled to its own policies, suited to its own circumstances and history, but they remember the inordinate delays, the corruption, and the regulatory uncertainty. They remember the lost applications, the inexplicable shortages of printer paper and toner, the networks that were down, the unexplained refusals, the actively hostile or corrupt officials, and the ministers who insisted everything was fine even as the system collapsed.
They remember being ignored while countries like Namibia, Mozambique, and Botswana welcomed them with open arms.
If South Africa wants to reclaim its position in the global mining industry, half-measures just won’t cut it.
The department needs to go beyond admitting administrative failure; it must actively restore trust. This means a fully transparent cadastre, open-access geological data, strict enforcement of exploration obligations, and limit the discretion exercised by political activists masquerading as public officials. Investor confidence depends on an efficient, predictable and fair system, not a bureaucracy manipulated for personal and political interests. Politicians must make policy, and officials must implement that policy in an even-handed way, not make it up as they go along.
This year’s Mining Indaba may just be South Africa’s last chance to prove it is serious about new mining investment
South Africa’s mining decline was not inevitable, it was a choice. For two decades, the government chose secrecy over transparency, bureaucracy over efficiency, and political favouritism over competence. It wasted its geological wealth through negligence, mismanagement, and sheer administrative failure.
Now, as the department and the CGS scramble to fix problems largely of their own making, South Africa faces an uncomfortable truth: the rest of the world might just have moved on. The investors who left have quite likely found better opportunities elsewhere. The lost decades cannot be reclaimed. The question is no longer whether South Africa can fix its mining sector; the question is whether investors will ever trust it again.
This year’s Mining Indaba may just be South Africa’s last chance to prove it is serious about new mining investment – and, interestingly, President Cyril Ramaphosa has elected to personally take the keynote speaking slot normally occupied by the mines minister.
The country’s leaders and policymakers must show that they understand what is at stake. Otherwise, the mining sector that was once described as the flywheel on South Africa’s economy, will be nothing more than a memory of a squandered past.
