CLARENCE TSHITEREKE: Clean energy revolution finds SA lacking critical minerals strategy

As the world transitions from coal and hydrocarbons to green energy solutions, critical minerals have taken on a new salience. The demand for these minerals is compounded by it only being available in small quantities. Availability and access to critical minerals have come to underpin countries’ national security.

Through strategic policy positioning the SA government must lead its critical minerals sector to seize opportunities of the clean energy revolution. This requires urgently setting out a vision to grow and strategically position its critical minerals sector. This is critical because SA remains pre-eminently a mining nation with rich geological reserves, established expertise in extracting minerals, and a reliable track record as a supplier of minerals. Such a strategy would require extensive, genuine public consultation to harmonise competing interests between the government, industry, communities, partners and stakeholders.

Minerals that are essential to the economy and the supply of which may be disrupted are classified as critical. These are metals that are central to the sustainability of hi-tech sectors and devices, for personal and commercial use, for electronics such as smartphones and tablets; high-definition television sets; wind turbine magnets; nuclear reactors; photovoltaics; electric vehicles batteries and proton exchange membrane electrolysers. These necessary products have become embedded in our daily lives and are produced in industrial quantities to meet the ever-growing global demand. As such, critical minerals are essential to the prosperity of the global economy, and their potential for supply chain vulnerabilities has become a universal concern.

A composite list of critical minerals is difficult to establish, but the following are the primary ingredients of most products: cobalt, copper, iridium, lithium, manganese, nickel and platinum group metals (PGMs). Of these 74% of global platinum, 36% of manganese and 89% of iridium is mined in SA. Others, such as chromium, fluorspar, titanium mineral concentrates, uranium (a byproduct of gold refining), vanadium and zirconium mineral concentrates are available here in various quantities. In addition, out of a total of 17 rare earth metallic elements in the periodic table’s lanthanide series 15 occur in SA, among them neodymium, praseodymium and dysprosium.

Enhance trade

Most industrialised countries do not have such critical mineral endowments and are therefore dependent on imports. A general concern is that countries with critical minerals may use control of such resources as leverage on other issues. To mitigate their vulnerabilities from potential supply disruptions, developed countries have formulated national critical mineral strategies, focusing primarily on reducing national vulnerability to disruption to ensure sustainability of their advanced technologies and industrial bases.

Due to these realities SA urgently needs a national critical minerals strategy to enhance international trade and co-operation in domestic exploration investments regarding critical minerals. It should also consider industry incentives, research & development, production, global supply chain efficiencies, mine tailings management and the growth of dangerous artisanal mining.

It is equally imperative that our strategic endowment in critical minerals be leveraged to influence price and demand volatility while mitigating against shortfalls. Such a strategy should establish a progressive collaborative framework that addresses the absence of downstream processing capability, which has so far caused the export of domestically produced ores and concentrates for further processing elsewhere.

In meeting the current and projected global demand for critical minerals in the short to medium term there is an urgent need to establish domestic processing facilities and competence. This will contribute to high-purity and high-value materials while accelerating SA’s scientific innovation and creating much-needed jobs.

SA’s mining employment is anchored by critical minerals with PGMs as the largest mining employer (172,159 workers in 2022), led by Anglo American Platinum and Impala Platinum. Sustainability and relative competitiveness of this industry and its workforce depends on securing export markets for PGMs at prices that guarantee reasonable profit margins.

Safeguarding interests

Changing times call for new strategies and tactics. In the mid-1980s SA’s gold mining industry was the largest mining employer with more than 500,000 employees. Gold mining employment shrank to 144,790 in 2011 and just 93,998 in 2021, and the downward trend continues. Preserving employment opportunities requires a proactive strategy that focuses on developing a diverse workforce that can be reskilled and transferred from one commodity to the other. The gold mine labour haemorrhage could have been at least partly averted through commodity cross transfer had government and industry agreed on a robust strategy.

The government released its Exploration Strategy and Implementation Plan for the mining industry in 2022. Its aims are broad and tailored towards attracting mineral exploration investments, reigniting minerals development, accelerating new mineral discoveries and promoting responsible use of minerals resources with due recognition of environmental, social, sustainable growth and corporate governance principles. The plan’s provisions for streamlined regulatory requirements regarding prospecting licensing turnaround times is admirable. However, what is required is a dedicated critical minerals strategy that responds to current and projected supply demands while safeguarding SA’s national interests.

Though the plan identifies critical minerals and metals that are essential for responding to the global shift towards the green economy, it is insufficient to leverage SA’s strategic critical minerals endowments to the global stage. The required skills and competencies to develop a national critical minerals strategy exist in the government and private sector. The absence of a critical minerals strategy is therefore shameful and should be a concern for all since such a strategy will create jobs and national wealth.

To discuss aspects of critical minerals exploration opportunities, investment strategies and possible national policy positions, the African Critical Minerals Summit will take place on August 29-30 at the Sandton Convention Centre.

• Tshitereke is communications director for Africa’s Critical Minerals Summit.