Drilling and blasting

Africa Outlook Features Zizwe

Mining remains an integral economic pillar in South Africa.

In 2021, the sector contributed R480.9 billion to South African GDP, R78.1 billion in taxes, and employed close to half a million people, as the continent’s second-largest economy slowly recovers from its biggest contraction in a century.

Prospects for the mining industry had been blighted by decades of diminishing output and the reluctance of investors to build new mines. However, record mining company profits and bolstered government revenue has been generated by a surge in the demand and price of commodities.

“The South African mining industry is healthy, with promising commodity prices,” opens Kobie Pruis, CEO of Zizwe Opencast Mining (Zizwe).

“Demand for coal, for example, has increased as a result of the war in Ukraine, and coal prices are soaring which is resulting in big opportunities in South Africa. In general, commodities are doing well, which makes mining very attractive in the country.”

Mining will play a significant role in accelerating South Africa’s recovery from the COVID-19 pandemic and its subsequent slump. Indeed, when the economic fortunes of South Africa dip, the mining industry typically takes centre stage. It is often the difficult times that truly shape us, and as those in the mining industry know, heat and pressure reveal something of true value.

Prices for most of South Africa’s exported metals, such as gold, platinum and iron ore, are now as great as they were at the height of the last commodity boom in 2011; with peak global metals prices comes job creation and economic growth, and these prices have helped to sustain the South African economy amid the decline of hospitality and tourism as a result of the pandemic.

South Africa’s trade balance surplus has been increasing year on year, driven primarily by exporting minerals and precious metals, as well as the likes of transport equipment, chemical and agricultural products. High commodity prices, coupled with global demand, are good for the country’s economy, and the mining sector in particular.

Once the upward cycle in commodity prices comes to an end, however, South Africa needs to take advantage of new mining opportunities and support overall growth. Mining plays a dual socio-economic role in South Africa, and grasping these opportunities can help pave the way to a more inclusive and equitable economy. 

“Once government expedites mining licenses and funding for new projects, huge growth potential can be unlocked. I would like to see the barrier to entry of the mining industry lowered in South Africa, and consequently make the market more accessible to its various role players,” affirms Pruis.

“It would be quite the intervention if government would expedite this movement in order to grow our economy. South Africa consists of various attractive investment opportunities, and we need to do our bit to capitalise on the traction that we are experiencing worldwide.”

“The South African mining industry is healthy, with promising commodity prices”

Kobie Pruis, CEO, Zizwe