Industry shows promise despite challenges

The South African mining industry continues to show promise in terms of base metals extraction and production, despite challenges such as the impact of Covid-19, supply chain constraints and poor infrastructure, according to law firm Beech Veltman.

“South Africa is well known for its large reserves of platinum-group metals, manganese, chromium and gold, but is also recognised for minerals such as titanium, vanadium, vermiculite and fluorspar. It also has significant reserves of copper and nickel, with smaller reserves of zinc,” Beech Veltman CEO Warren Beech tells Mining Weekly.

He explains that, despite the Covid-19 measures, the country’s mining industry, including the base metals sector, continues to produce and significantly contribute to the economy.

While exports have been significantly impacted on by the country’s supply chain constraints – exacerbated by inadequate rail and port infrastructure – the overall industry continues to show potential.

“There has been a increase in demand for base metals, owing to the global shift to a greener economy, and South Africa is no exception,” states Beech.

The country has also committed to a just transition in the longer term and to changing its energy mix to include renewable-energy sources.

Further, the increased demand for metals that support the transition to a green economy, and the extraction and beneficiation of these minerals, must be viewed within the broader context of the significant pressure being placed on the South African mining industry itself to transition towards becoming more energy efficient at its operations. In so doing, the mining industry itself can secure better environmental, social and corporate governance (ESG) scores, and become more attractive to investors, Beech explains.

“ESG has become an important source of data that informs investment decisions. It should also be used to assess country-specific risk.

“ESG is going to continue playing a crucial role in the transformation and transition of South Africa’s mining industry. Base metals miners are ideally placed because they can apply ESG principles themselves, and also contribute to the global transition to the green economy because of the metals that they mine and beneficiate,” concludes Beech.