South Africa Ranked 10th-Worst Mining Destination in the World

April 19, 2022by Extractives Baraza

Mining in South Africa is becoming increasingly unattractive to investors.

Mining in South Africa is becoming increasingly unattractive to investors. (Image source: Getty Images)

By: Lisa Steyn

A highly regarded global survey has for the first time ranked South Africa among the world’s 10 most unattractive mining destinations.

According to the Fraser Institute’s annual survey of mining companies, which measures the investment attractiveness of various mining jurisdictions, South Africa ranked 10th last in an Investment Attractiveness Index.

The index considers both policy and mineral potential and other metrics based on responses from companies operating and exploring in these jurisdictions.

Ranking 75th for 2021, South Africa has slipped down significantly after ranking 60th in 2020 and 40th in 2019.

South Africa occupies the bottom ranks with the likes of the Democratic Republic of Congo and Venezuela. Zimbabwe is ranked dead last as the least attractive jurisdiction in the world.

Commenting on the survey, which was released on Tuesday, the Minerals Council South Africa noted the country’s investment attractiveness ranking was the worst it has been since 2009.

“This is a deeply disappointing reflection of the state of mining in South Africa. It is worrying that the trend remains downwards rather than stabilising or improving. We must revitalise our efforts to address the underlying challenges informing this trend,” said Minerals Council CEO Roger Baxter.

The council is working closely with the Department of Mineral Resources and Energy and other departments to address the many challenges mining companies are facing, “but we are not gaining the traction or urgency we’d like to see in resolving these challenges”, Baxter said.

Of major concern to the council is the backlog of more than 4 000 mining and prospecting rights as well as mineral right transfer applications within the department. Also worrying is slow progress to replace the failed South African Mineral Resources Administration cadastral system with a modern, transparent, corruption-free, online system.

“Both these issues are curtailing much-needed investment in exploration and the development of a junior mining sector,” the council said.

The council has, however, welcomed the certainty brought by the high court judgment in September which ruled that the Mining Charter is a policy rather than regulatory document; that the continuing consequences of previous black economic empowerment deals should be recognised; and that the specific provisions around procurement in the document should be removed.

The Minerals Council and its bulk minerals members are actively engaging Transnet and Cabinet about the regression in railway capacity and productivity at key harbours. The council also said the departure of director-general Thabo Mokoena from the Department of Mineral Resources and Energy “presents an opportunity to inject fresh thinking into the department to revitalise our relationship with the regulator”.

Source: News24

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