By Shamiso Hlatshwayo
As the 29th installment of the Investing in African Mining Indaba draws near, key government and business leaders from across the globe are again preparing to gather on our shores for the world’s largest mining investment event. As the post-pandemic event calendar kicks off in full swing, South Africa’s mega event hosting skills will once again be in full spectacle, and a true testament of the country’s resilience and excellence even in the midst of challenging times. As a country regarded as one of the most minerally endowed in the world, South Africa is an obvious choice to host an event of such magnitude. Which for Brand South Africa confirms what we already know, that the world not only believes in South Africa, but is also ready to grow with South Africa.
This year’s theme is “Unlocking African Mining Investment: Stability, Security, and Supply” which is particularly apt in that it will seek to explore and consider the challenges and opportunities facing the continent’s mining industry amidst a perfect storm of increased global demand for green energy supply and the growing need for energy in the region. As a country we find ourselves in the eye of the storm as our efforts to navigate the energy crisis we face has left South Africa and our mining sector exposed to a number of real and exaggerated risks that have had the intended consequence of marring the country’s image as a reputable investment destination.
As the custodian of the Nation Brand, we understand these exaggerated risks as brand disablers, which according to Dzingira Matenga former MD of Accenture and current MD of Zamlim Investments are an “over exaggerated perspective around risks to investors in South Africa”. As one of the foremost mining experts on the continent Matenga’s expert assessment on the mining sector in South Africa reveals that even though the country faces significant challenges in the area of energy security at this present moment, it is indeed an opportunity for future growth. According to Matenga South Africa’s Mining Charter albeit misunderstood as one of the key drivers of policy uncertainty has in fact increased opportunities for investors of all backgrounds (from the previously disadvantaged to foreign businesses) to participate in this industry. Some of the ways the charter has done this is by placing a requirement for mining operations to diversify their power consumption, thus creating an increased need for the investment in renewables technology. As such it is presently forecast that miners will self-generate 2.3GW of energy by 2025, which presents significant opportunity for economic growth and employment as this will create increased demand for solar panel and cable manufacturing, as well as power C&I players.
As a country strategically poised to be at the forefront of the green energy revolution on the continent, South Africa holds about 91% of the world’s platinum group metals (PGM’S) reserves, which due to the growth of the hydrogen fuel cell and green technology sectors, will increase the demand for PGM’s and cement the country’s role in significantly contributing to the global goal of a just energy transition. This green energy growth will also require diversified logistics including isotainers for green hydrogen and green ammonia – South Africa has a requirement of over 5,000 isotainers over the next 3-5 years, and this represents a R10 billion (US$600 million) opportunity for existing and new manufacturing market entrants. With an increased demand for both household and commercial energy, South Africa is likely to lead the continental wave of increased transition towards miners becoming energy businesses.
As a country that continues to pride itself as one built on resilience and endless possibilities, it is reassuring that the world recognizes this as well. This recognition is best captured through the results from Brand South Africa’s 2022 Global Reputation Study, in which results from a total of 13 markets across the world show that South Africa continues to remain top of mind in Investments and Exports. From an investment perspective, 59% of respondents stated that they would invest in the country, while 75% indicated they would do business with South Africa. These sentiments are directly attributed to South Africa’s ease of doing business environment, largely regarded as having low operating costs, an appealing regulatory environment, and a vibrant entrepreneurial landscape. The study further indicates that the country’s main investment and export reputation drivers are natural resources, which speaks to the strength and quality of the countries mining sector.
As South Africa once again prepares to welcome the continent and the world, we aim to reassure new and existing investors that the country is not only open for business, but that they are assured of continued growth, returns and ample opportunities. Some of these opportunities as identified by Matenga are namely in three areas; firstly, increase our exploration spend in order to stimulate upside and downstream investment opportunities in exploration OEM’s, EPC’s, project management players, lab testing facilities and logistics planners. Secondly, maximize the country’s unique green energy value proposition to become a leading player in the projected US$7 billion green hydrogen market and US$21 billion fluorochemicals market. Lastly, open up network industry development to private sector players in order to increase the countries national logistics capacity.
South Africa remains a beacon of hope to the rest of the world as a country that has managed to overcome adversity and thrive in the midst of crippling complexity. We have managed to achieve this through our unwavering commitment for inclusive growth, and transformation, which is largely mistakenly regarded as bad for business. However, we have proven that it is a unique opportunity to not only change the lived realities of many, but also a chance to recreate and reconfigure value chains that no longer suit the Global status quo.
This Thought Leadership piece in also published in the Daily Maverick newspaper
About the Author
Shamiso Hlatshwayo is the Acting General Manager for Research – Brand South Africa
About Brand South Africa
Brand South Africa is the official marketing agency of South Africa, with a mandate to build the country’s brand reputation, to improve its global competitiveness. Its aim is also to build pride and patriotism among South Africans, to contribute to social cohesion and nation brand ambassadorship.
