February 2019

Country Snapshot: South Africa

  • By AusIMM

A well-known mining nation with a significant mineral endowment, rising costs, decreased commodity prices and political uncertainty are major barriers to South Africa’s once world-leading levels of production

South Africa – key facts.

South Africa is home to more than 50 million people and has a well-established large-scale mining industry dating back to the 19th century. Despite the mining industry bringing in valuable foreign investment to the nation and bolstering its economy, the country continues to struggle with the legacies of colonialism and Apartheid. High costs, low commodity prices, political uncertainty and, in some cases, alleged corruption, also affect the industry and have hampered its ability to grow sustainably. However, South Africa is blessed with a variety of minerals and resources and is home to the world’s largest known gold resource – the Witwatersrand Basin.

Mining in South Africa – a brief history

Modern mining activity in South Africa arguably started in 1867 when the first diamond in the country was discovered near Hopetown. Just under 20 years later, a gold rush centring on the world-famous Witwatersrand Basin saw the establishment of Johannesburg. The city’s population grew dramatically due to the gold rush, reaching 100 000 people in 1896 – only ten years after gold was discovered in the region. Johannesburg was known as ‘Egoli’ – literally ‘the city of gold’.

Gold

The Witwatersrand Basin lies on the Kaapvaal Craton, and mining in this region has reached depths of four kilometres underground. Alongside gold, up to 70 types of ore minerals have been identified in the Witwatersrand reefs, including diamonds. The Mponeng mine, south-west of Johannesburg and operated by AngloGold Ashanti, is the world’s deepest gold mine.

At one time, South Africa was the world’s largest gold producer; however, the need to go deeper to mine gold, alongside dropping prices, has meant that the industry has waned in recent years. In the absence of new discoveries of economic gold, there are fears that the industry will soon no longer be profitable. The Minerals Council of South Africa estimates that, at current gold prices, over 50 per cent of the country struggles to make a profit; the actual figure has been estimated as high as 75 per cent. Despite the slowdown, South Africa remained in the top ten of gold producing countries in 2017. Last year, gold was valued as South Africa’s fourth most significant export. The gold mining industry currently employs more than 100 000 people; however, this number has declined steadily as the industry has struggled against economic headwinds.

Coal

Coal was listed as South Africa’s second most significant export in 2017 (valued at $5.74 billion) after platinum. The Minerals Council of South Africa has said that, at current production rates, there are enough coal reserves in South Africa to meet its needs for 100 years. The country’s coal mines are generally clustered around the north-east of the country, as part of the Ecca deposits, which are a stratum of the Karoo Supergroup.
The coal industry in South Africa was historically closely linked with the gold industry, with the first significant coal mining and production taking place near Witwatersrand on the Highveld coal field.

There are roughly 80 000 people employed in South Africa’s coal sector, behind only the gold and platinum sectors in terms of workforce.

Diamonds

As with the gold and coal sectors, diamond mining in South Africa dates back to the 1860s. The Eureka diamond, weighing 21.3 carats, was found in the Hopetown region in 1867. This was the first diamond found in South Africa, and more soon followed. The city of Kimberley, in the Northern Cape Province, soon became known as the nation’s diamond capital. The igneous rock kimberlite is named after the city in recognition of its significant diamond heritage. Following more than 100 years of diamond mining, the activity is still a major contributor to South Africa’s mineral industry, and in 2017 the country produced 9.7 Mct of diamonds.

Other metals and minerals

South Africa is also known for its significant and valuable platinum group metal deposits; platinum is an indispensable modern commodity with applications in technology, healthcare and jewellery.

The country also has reserves of chrome, vanadium, titanium and other minerals.

Southern African Institute of Mining and Metallurgy

The Southern African Institute of Mining and Metallurgy (SAIMM) is the country’s professional institute for resources practitioners, fulfilling much the same role as   AusIMM. Alongside AusIMM, SAIMM is one of the founding partners of the Global Mineral Professional Alliance (GMPA), whose member organisations take a leading role in promoting best practice professionalism in the global resources sector.

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