MINING AND BENEFICIATION SECTOR

Global Overview

In 2023, the global mining industry faced notable challenges. While the production of essential commodities grew, the financial performance of the top 40 mining companies was constrained by declining commodity prices and rising input costs. This resulted in a revenue drop of over 7%. These trends are projected to continue into 2024, marking the first time since 2016 that the industry will see a second consecutive year of revenue decline. Leading mining companies are under pressure to invest in both growth and transformation amidst structural and cyclical challenges, even as profit margins tighten. (Source: PwC, 2024)

National Overview

The Department of Mineral Resources and Energy (DMRE) has outlined an Exploration Strategy for the Mining Industry in South Africa, aiming to attract 5% of global mineral exploration spending at approximately USD 0.9 billion. This initiative seeks to drive new mineral discoveries, mining development, and optimized resource utilization.

Key Highlights:

• In 2022, the mining sector contributed 44.2% of South Africa’s total export revenue and 8.1% of GDP.
• Approximately 475,000 individuals are employed in the sector.
• Established mining conglomerates dominate primary production, while emerging miners lead exploration activities.
• The sector maintains robust links with manufacturing, supplying raw materials to metal fabrication industries and fostering backward and lateral connections with services and manufacturing sectors.

(Source: InvestSA, South Africa Investment Conference 2023 Case Booklet)

KwaZulu-Natal Overview

Over the past 30 years, KwaZulu-Natal’s mining investment share has remained stagnant at 4.8%, with its GDP contribution declining from 2.9% in 1996 to 0.8% in 2023. Mining now accounts for less than 1% of the provincial economy.

Key Challenges:

• The “Coal-Rim Cluster” in northern KZN, once a vital economic driver, has experienced a significant decline in coal mining activity.
• The Richards Bay Coal Terminal (RBCT) has seen reduced coal exports since COVID-19, further impacting the sector’s performance.
• KZN’s coal reserves are predominantly anthracitic, found in thin seams, and concentrated in five coalfields: Klip River, Utrecht, Vryheid, Nongoma, and Somkele.

Major Mining Areas:

• Northern KZN, including Zululand-Dundee, Newcastle, Utrecht, and Hlobane, is the focal point for coal mining.
• Richards Bay Minerals (RBM) and KZN Sands contribute significantly, with heavy minerals extracted from the region’s sand dunes.

Major Players and Investment Opportunities in KZN

KwaZulu-Natal offers significant opportunities for investment in coal, titanium minerals, anthracite, and aluminium production. With focused efforts to modernize infrastructure and attract investment, the province is well-positioned to leverage its mineral resources for sustainable economic growth.