The South African Mining Industry – A snippet of its next frontier opportunities

Mining in South Africa began with the discovery of a diamond along the banks of the Orange River - close to Hopetown in what is now the Northern Cape Province. This finding led to the discovery of the kimberlite pipe and the subsequent surge of large-scale diamond mining operations in the central part of the country. By the 1880s, the town of Kimberley was producing around 95% of the world's diamond supply. Around the same time, prospectors discovered the existence of gold-bearing reef belts in Johannesburg, intensifying the surge of Western investors and migration of workforce from other parts of the country into these mining areas.

Over the years, more minerals and metals have been discovered across the country with diamond, gold, platinum, and coal dominating the commercial mining operations. The mining sector has in multiple ways, shaped the economic, political, and social landscape of the country. It has contributed immensely towards economic growth, skills, and infrastructure development. The sector has also enabled industrialisation, inducing the formation of secondary and tertiary industries thus creating forward and backward linkages. Backward linkages refer to the supply of goods and services into the mining sector, and forward linkages refer to the processing of the natural resources and their use to produce other finished goods.

Today, the mining sector remains a major contributor to South Africa’s economy.  In 2022, it contributed R494b to the country’s GDP.  This equates to a 7,53% contribution to the economy.  The sector also employs 475 561 individuals (source: Mineral Council South Africa, 2022 figures).

Future projections show that the South African mining sector still has the potential to contribute towards transformation of the country. This article investigates two areas that can serve as the next frontier of the South African mining industry.

The 4th Industrial revolution (4IR)

The 4th Industrial Revolution has become a buzzword in global development.  Simply put, 4IR alludes to the introduction of disruptive technologies and trends that change the way people live and work.

Within the context of mining (especially in South Africa), there has been some contestation in embracing technologies that introduce new ways of working.  This is based on the fear of job losses resultant from technologies that could reduce human capital requirements. 

To counter this effect, it has been suggested that the reskilling and upskilling of affected mine workers into other roles within the mining value chain will help mitigate the potential negative impact of rolling out new technologies, resulting in the long run, in the overall positive transformation of the sector.

In addition, 4IR opens a wide range of market offtake opportunities for minerals to be used in products that can aid the creation of new industries and product lines.  For example, 3D printing – a 4IR technology supports the use of minerals in new automotive designs as well as medical products, creating opportunities for enhanced output in these traditional industries. 

The Green Economy

With the recent pressure to reduce greenhouse gas emissions, countries, and industries all over the world have put in place measures to mitigate against carbon emissions. Key to the transition towards a greener society, is the deployment of green technology particularly in the energy arena.

South Africa holds a comparative advantage in this since it is the world’s leading primary producer of Platinum Group Metals (PGMs).  PGMs have a strategic role in creation of the hydrogen economy: they are used in the production of electrolysers needed to produce green hydrogen. Presently valued at over US$150b with a compound annual growth rate of 9,3%, the green hydrogen generation market is seen as the new frontier for alternative energy solutions; green hydrogen is also at the centre of a global drive to meet climate change targets set at COP Conferences. 

The dawning of a new era

It is evident that the mining sector still holds an important role in the industrialisation of South Africa as well as globally. The Country hosts some of the largest mineral reserves in the world, and thus provides further opportunity for growth.

This sector is at the centre of the OR Tambo Special Economic Zone’s Phase 1 development.  The SEZ supports the growth of beneficiated minerals from South Africa, with a focus on lightweight, high-margin, export-oriented products such as jewellery, diamonds, fuel cells and 3D products.

For more information on the investment opportunities available at the SEZ, visit: