ASHLEY NYIKO MABASA: In light of Trump’s threats, SA can boost mineral beneficiation through the EU and China

SA’s potential to leverage its critical minerals for industrialisation is closely tied to its relationships with China and the EU. Despite possessing vast deposits of these essential minerals, the country continues to rely heavily on exporting raw materials, reflecting a broader trend of deindustrialisation — a challenge not unique to SA but also observed in nations such as the US. China exerts huge influence over global mineral output. 

Efforts to establish our coherent critical minerals strategy in SA have yet to yield a definitive global stance. Mineral resources Gwede Mantashe has underscored the necessity for clarity in the nation’s approach. However, coal remains the country’s predominant energy source. Concurrently, minerals such as chrome and platinum are crucial, particularly within Southern Africa’s interconnected resource economy. 

The AU’s critical minerals strategy positions the continent as a pivotal player in global trade, but the true measure of a mineral’s significance lies in its industrial applications. SA’s efforts in this arena face stiff competition from China, which dominates the global supply chain and manufacturing industry — a challenge also experienced by the US and Germany.

Meanwhile, the EU’s demand for rare earth minerals, vital to its industrial sustainability, has spurred initiatives to strengthen partnerships with Africa. The EU-Africa partnership on sustainable raw materials aligns with broader goals of a just transition to cleaner energy. Yet in the global value chain African countries remain suppliers rather than consumers of critical minerals, despite their role in climate and decarbonisation strategies. 

SA’s industrialisation has long been anchored in its mineral-energy complex, a foundation laid during Jan Smuts’ government in the early 20th century. State-led initiatives saw the creation of entities such as Eskom, Transnet and the Industrial Development Corporation (IDC), which structured supply chains and drove industrial expansion. Coal emerged as the backbone of this developmental model, shaping the country’s economic trajectory from the 1920s onward. Even today coal still generates 85% of SA’s electricity, making any transition away from it a complex and politically charged challenge. 

Smuts’ leadership was instrumental in shaping SA’s industrial base. The question now is whether the current leadership possesses the vision and capability to harness the country’s critical minerals for economic development in a similarly strategic manner. The IDC, once a powerful force in shaping industry, has diminished in influence since its formative years, yet it played a crucial role in establishing the metals and chemicals sectors. Subsequent governments, including that of DF Malan, continued this trajectory, creating major state-owned enterprises Sasol in 1955, Safmarine in 1954, Armscor in 1968 and Sentrachem in 1967. 

During this period the Council for Scientific & Industrial Research (CSIR) and the IDC were closely intertwined with the rise of these industrial giants, as well as with the expansion of the timber sector. Sappi, with Saiccor at the forefront of chemical innovation, emerged as a key player in this ecosystem. This historical model of state-led industrialisation raises pressing questions about whether today’s leadership can replicate such a strategic approach in leveraging SA’s mineral wealth for sustainable economic growth. 

However, in the 21st century SA must transition from a carbon-based economy to a low-carbon one. There is growing debate over the country’s role in the downstream segment of the mineral value chain. To fully capitalise on its critical minerals SA is likely to depend on Chinese technology. 

The challenge of beneficiation 

To maximise the benefits of its critical minerals SA must integrate more deeply into global trade. However, beneficiation — the process of adding value to raw minerals before export — requires advanced technologies the country lacks. As global demand for rare earth metals soars, Europe grapples with supply chain disruptions, geopolitical risks and the challenge of ensuring fair collaboration in mineral trade. 

SA could leverage its relationship with the EU to advance its mineral beneficiation ambitions. By 2030 EU demand for critical minerals is expected to rise dramatically — sixfold for lithium alone, with further increases by 2050. Europe now relies heavily on imports, producing just 3% of its critical minerals domestically. The EU’s Critical Raw Materials Act aims to increase this to 10%, presenting an opportunity for SA to expand its market presence in Europe. 

China’s grip on critical minerals 

SA’s ability to break free from the pit-to-port supply chain model remains doubtful. When discussions on critical minerals gained momentum in 2011, China restricted exports, causing prices to surge more than 15 times overnight. This posed a major threat to European industries reliant on these elements for manufacturing wind turbines and other renewable energy technologies.

China’s rise as the world’s primary processor of raw materials can be traced back to the 1980s. While European countries and the US shifted towards service-based economies, China strategically positioned itself within the value chain. Today, China holds a monopoly over processing technologies and has imposed sanctions on the export of certain critical minerals to the US, including gallium, rhenium and antimony. 

This has implications for the US, as antimony is crucial for military applications and other industries such as solar energy. As solar power emerges as a leading renewable energy source, antimony’s role in improving the efficiency of solar panels becomes important. The US and Europe rely on China for antimony supplies. In fact, China, Uzbekistan and Russia control 80% of the global supply, with China alone holding 50% of known reserves. Moreover, China dominates the midstream refining process, controlling 50% of antimony processing. This reliance leaves Western nations vulnerable, particularly the defence sector. 

Europe’s legislative response 

In response to supply risks Europe passed the Critical Raw Materials Act in 2024, introducing policies to reduce dependency on third-party nations. The legislation caps the share of any critical raw material sourced from a single country at 65%, a diversification strategy aimed at securing European industries against future supply shocks. 

While the act encourages Europe to open new mines and invest in refining and recycling, it also creates an opportunity for SA to expand its market share. By limiting reliance on any one supplier the EU’s policy shift could benefit SA and other African nations within the European partnership framework. 

Without a co-ordinated and technology-driven approach SA risks remaining a raw material exporter rather than a player in industrial beneficiation. While critical minerals offer economic potential, the country lacks the necessary infrastructure and policy cohesion to capitalise on them.

As global competition intensifies, SA must act decisively to avoid being locked into a neocolonial economic model — one where its vast mineral wealth continues to serve foreign industries rather than its own development. 

• Mabasa, an executive manager in the office of the deputy minister of mineral resources & petroleum, is co-chair of the Brics Youth Council.