South Africa’s Mining Sector Falters Under Policy Pressure

South Africa’s mining industry, once a global powerhouse, is now grappling with stagnation and decline—largely attributed to decades of policy instability, regulatory overreach, and transformation mandates that have eroded investor confidence and operational viability.

Despite repeated appeals from industry leaders, government policies have remained rigid and unpredictable. The result: no new exploration projects in over two decades, flat production output, and a growing list of abandoned mines—now exceeding 6,000 sites. This has cost the country hundreds of billions in potential export earnings and hundreds of thousands of jobs.

A proposed tax on chrome exports, aimed at encouraging domestic beneficiation, has sparked fresh concern. Mining analyst Peter Major of Modern Corporate Solutions warns that such measures could further damage South Africa’s competitiveness. “The lack of processing isn’t due to corporate greed—it’s rooted in government failures,” Major told BizNews.

Once hailed for its globally competitive mining legislation, South Africa now ranks among the least attractive jurisdictions for mining investment. Frequent legislative changes, threats of nationalisation, and stringent Black Economic Empowerment (BEE) requirements have created a climate of uncertainty. Rising electricity costs and deteriorating logistics have compounded the challenges.

Major points to a steady decline in exploration spending since the early 1990s, unaffected even by the global commodity supercycle that began in 2004. “It’s not about metal prices anymore—it’s about policy,” he said. “Companies won’t sink shafts even if they find deposits. The legislation has gone wrong.”

The situation mirrors the decline seen in other African mining giants like Zambia and Zimbabwe, where similar policy missteps led to industry collapse. South Africa’s transformation policies, while well-intentioned, have introduced complex ownership and procurement requirements that deter capital investment.

Anglo American CEO Duncan Wanblad echoed these concerns at the Joburg Mining Indaba, noting that South Africa has lost a generation of mines due to regulatory delays. “It takes 17 years to bring a mine from discovery to full production. We’ve foregone that entire cycle,” Wanblad said.

In contrast, Major highlighted the mining boom underway in the United States, where streamlined permitting under President Trump has accelerated exploration. “Permits are being issued in weeks, not years. North America is surging ahead while South Africa doubles down on restrictive policies,” he said.

As South Africa considers further regulatory changes, industry leaders urge a shift toward stability, predictability, and investment-friendly reforms. Without it, the country risks deepening its mining malaise—and losing its place in the global minerals economy.