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South Africa’s critical minerals landscape poised for growth

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South Africa's critical minerals landscape is poised for growth, with challenges and opportunities intertwined.
South Africa is the top producer of manganese in the world and the country hosts large deposits of manganese, iron ore, zinc, and copper in the Northern Cape Province of South Africa. South Africa's critical minerals landscape is poised for growth, with challenges and opportunities intertwined. Image credit: Leon Louw for WhyAfrica.

South Africa’s critical minerals landscape poised for growth

South Africa‘s critical minerals landscape is poised for growth, with challenges and opportunities intertwined.

By Dominic Varrie, Methembeni Moyo and Lili Nupen at law firm NSDV

South Africa’s critical minerals (CRMs) industry stands at the intersection of immense potential and significant challenges.

The surge in demand for CRMs in South Africa and across the African continent has been driven by factors such as the rise of electric vehicles, renewable energy adoption, and technological advancements.

Despite the abundance of CRMs in South Africa, the government’s discussions around developing a strategy to support green-economy supply chains locally and internationally have yet to materialise into concrete action.

The state of the CRM industry in South Africa

As the world’s top producer of Platinum Group Metals (PGMs) and manganese, and with substantial vanadium reserves (crucial for technologies like redox flow batteries), South Africa is primed to play a pivotal role in the CRM value chain.

Lili Nupen is the co-founder and Director of Mining and Environmental Law at NSDV

Most of South Africa’s CRM reserves remain unexplored and if explored, underutilised, owing to a reticence by investors and mining companies to invest in South Africa because of the delays in licensing and permitting, and the rail and port infrastructure bottlenecks to name a few hurdles.

Policy changes in Africa

Across the continent, the rapidly changing laws and policies surrounding the mining, processing, and marketing of CRMs pose a common challenge.

Usually, policy changes in the mining sector are seen as hinderances to doing business as the required adaptation can entail significant investment of both time and money.

Miners (and investors) require legal certainty for long periods as their investments can take anything between 10 to 30 years to realise.

We’re little more optimistic at NSDV and believe this metamorphosis of the mining industry to be a unique opportunity for businesses to co-create policy on CRMs with government.

There is a small window of opportunity where governments are willing to engage with civil society, diplomatic missions, chambers of mines, and industry captains to craft policies that will be mutually beneficial to the host government as well as mining companies and investors.

Methembeni Moyo is a Mining and Construction Lawyer at NSDV

Excitement in the CRM space, especially in junior mining

What really excites us about the CRMs space is the opportunities presented to junior miners in the current shifting global geopolitical sands.

The Russia-Ukraine conflict, and the frosting of the United States and European Union’s relationship with China has not only created an unprecedented demand for Africa’s CRMs but also a new “scramble” for minerals-rich Africa as both the global West and the global East seek to cement trade and diplomatic ties with the various African states, including of course South Africa.

Junior Miners are pivotal to the CRM industry, serving as catalysts for exploration, innovation, and diversification in the industry.

Their agility and risk-taking nature contribute to the discovery of new mineral deposits and the adoption of cutting-edge technologies, fostering a more efficient and resilient supply chain.

Additionally, their presence introduces healthy competition, encouraging industry wide improvements and sustainable practices.

Dominic Varrie is Candidate Attorney at NSDV

As international investments into bolstering the CRM industry increase, including projects like the Lobito Corridor, the industry is positioning itself for a long period of growth, contributing to a more efficient and resilient supply chain.

South Africa’s critical minerals landscape is poised for growth, with challenges and opportunities intertwined.

Collaborative efforts and a commitment to overcoming legal and operational challenges, could see South Africa unlock its full potential in the CRM industry, making significant contributions to the global supply chain and driving sustainable development.

Dominic Varrie is Candidate Attorney at NSDV,  Methembeni Moyo is a Mining and Construction Lawyer at NSDV and Lili Nupen is the co-founder and Director of Mining and Environmental Law at NSDV

South Africa’s critical minerals landscape poised for growth

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South Africa’s critical minerals landscape poised for growth

 

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