FRED ARENDSE: SA risks running out of new projects to replace ageing mines

As we begin the new year let us not forget that 2024 was a pivotal year for SA’s mining sector, particularly for junior miners, which persevered through a complex and rapidly evolving landscape. 

The mining sector remains an indispensable part of SA’s economy, making a significant contribution to national GDP, employment and foreign-exchange earnings. Contributing 6.3% to GDP, the sector generated total primary sales of R793bn in 2024, demonstrating its pivotal role in economic activity. Mineral exports, valued at R781.6bn, highlight mining’s importance in bolstering the country’s trade balance and attracting global investment. 

In 2023 alone the mining trade provided direct employment to almost 500,000 people in SA. The largest employer among all mineral commodities was the platinum group metals (PGMs), which employed just over 38% of the total. In terms of production volume, PGMs were also SA’s largest produced commodity over the past decade. 

Despite these strides the industry has yet to see significant recovery, hampered by infrastructural challenges and an unfavourable economic climate, worsened by the dark period of load-shedding. 

The challenges facing the mining industry require a strong voice for small-scale mining. This voice must champion junior mining interests and advocate for meaningful reforms to unlock its vast potential, propelling the country into its next phase of mineral production and exploration. 

Aptly, we ended 2024 on a rather a high note, and believe me when I say our spirits are still high as we begin this year, thanks to the SA High Commission, jointly with the Federation of Indian Chambers of Commerce and Industry, India-SA Chamber of Commerce and the Industrial Development Corporation, for closing the year with a bang during its Business Conclave on December 2 in New Delhi and December 5 in Mumbai. 

The conclaves were designed to harness the commercial synergies and expansive market potential of both nations, encouraging a robust exchange of goods, services and investments. I participated as a panellist in the session on infrastructure, energy, mining and banking. 

The Business Conclave targeted priority sectors in high-growth markets as well as sectors holding significant potential, with the objective of creating export opportunities, increasing market penetration of SA exports and promoting SA as an investment destination. The delegation consisted of 38 companies, industry associations, special economic zones (SEZs) and municipalities. 

One of last year’s most notable events was the Saudi-SA Business Forum, held in October at the Sandton Convention Centre. It was an honour to moderate a fireside chat titled A New Era of Mining Collaboration, which brought together key players such as Abdulhameed Matlageto of Saudi Arabia’s industry and mineral resources industry, and Mzila Mthenjane, CEO of the Minerals Council SA. 

The forum highlighted the critical need for government support in bridging the gap between small-scale miners and major mining corporations. If SA is to compete on a global scale, junior miners must remain a national priority. The Junior Mining Council’s (JMC’s) support for Transnet’s strategic plan to allocate rail and port capacity to emerging black miners further reinforces the urgency of investing in infrastructure to enable growth. 

The launch of the R400m Junior Mining Exploration Fund was another significant milestone. This initiative reflects an understanding that junior miners are not only vital to the future of mining but also central to driving economic inclusion. 

However, the broader industry must confront a stark reality: unless exploration activity ramps up significantly, SA risks running out of new projects to replace ageing mines. This is an issue we cannot afford to ignore if we want to maintain our standing in the global mining arena. 

The 10th Annual Junior Indaba in May offered a vital platform for honest conversations about the challenges and opportunities in junior mining. Discussions delved into pressing topics, from the global demand for critical metals to environmental, social and governance considerations and the adoption of transformative technologies. 

The event reinforced a shared belief: junior miners hold the key to unlocking SA’s untapped potential. As the sector celebrated its achievements, a darker issue loomed large — “zamas-zamas” and thorny issue of illegal mining. This year the nation was shocked by the plight of thousands of illegal miners trapped in abandoned mines. While the rescue efforts under Operation Vala Umgodi received the deserved commendation, they also serve as a stark reminder of the systemic challenges facing our industry. 

Combating illegal mining demands a top-down approach. Arresting miners at the bottom of the chain addresses symptoms, not the cause. The true culprits — the crime kingpins and financial networks enabling these operations — must be brought to justice. 

October’s Transport Month underscored the crucial role of reliable infrastructure in sustaining SA’s mining sector. Transnet’s new CEO, Michelle Phillips, offered a glimmer of hope with her commitment to “stop the bleeding.” Yet junior miners have already borne the brunt of years of neglect. Infrastructure failures have cost the sector billions in lost revenue, and urgent intervention is needed to reverse the damage. 

As we step into 2025, the Mining Indaba’s theme, “Future-proofing African Mining, Today,” is expected to set the tone for a transformative era. Anchored on seven key pillars, the focus will be on industrialising Africa, adopting game-changing technologies and ensuring a Just Energy Transition becomes a reality. 

Undoubtedly, junior miners must seize this momentum. They represent the future of SA’s mining industry — a future that promises both challenges and immense opportunities. We remain committed to the mission to advocate for the interests and voices of junior miners and for policies that enable their success. 2024 has demonstrated the capacity of the industry to be resilient and push ahead irrespective of prevailing challenges. 

As we prepare for the journey ahead I am reminded of the powerful words from Marianne Williamson’s A Return to Love: Reflections on the Principles of a ‘Course in Miracles’: “Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us.” 

She goes on to say, “And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” 

• Arendse is president of the Junior Mining Council.