By Lehlohonolo Lehana.
The Department of Mineral and Petroleum Resources’ (DMPR’s) Critical Minerals and Metals Strategy has listed platinum, manganese, iron-ore, coal and chrome ore as “high-critical minerals” for South Africa.
Mineral and Petroleum Resources Minister Gwede Mantashe explained during the media briefing that the drafting of the strategy had started with adopting a robust methodology to determine the aspect of criticality of minerals.
This methodology was based on eight indicators including, among others, export potential, employment indicator, supply risk, export sales, domestic sales and substitutability.
The strategy further identifies mineral commodities such as gold, vanadium, palladium, rhodium and rare earth elements as minerals with “moderate to high criticality”.
Meanwhile, minerals such as copper, cobalt, lithium, graphite, nickel, titanium, phosphate, fluorspar, zirconium, uranium and aluminium were identified as minerals with “moderate criticality”.
Mantashe said this list would regularly be reviewed and updated owing to the fact that the criticality classification mix was dependent on underlying market conditions, exploration, technological advancement, substitutability, recycling and geopolitics, among other factors.
This is not the first time Government has sought to breathe fresh life into South Africa’s exploration sector. The DMPR launched a five-year exploration strategy in 2022, aiming to attract 5% of global mineral exploration spend, estimated at $900m at that time.
An implementation plan was also published. This, however, ended up in market dismay as two versions were made public simultaneously, both differing in certain respects to the strategy document.
Spending on exploration in South Africa has shrunk drasticallly from R6.1bn in 2006 to around R1.2bn in 2023. But in junior mining, there have been some green shoots. Junior mining revenues increased to just under R100bn in 2023 compared to R55bn in 2018.
He explained that the approval of the two new policy documents was aimed at ensuring policy and regulatory certainty to advance the country’s potential in the global market for minerals.
“Although the term critical minerals has been used by various nations for a considerable period, there has been no universal consensus on the definition of critical minerals, as several countries have interchangeably used and defined ‘critical, strategic or future minerals’ according to their importance in economic growth and industrialisation, technological advancements, energy transition, geopolitical considerations, supply chain vulnerabilities, environmental and social concerns and strategic importance.
“It is within this context that in 2023, we resolved at the African Critical Minerals Summit, that Africa should develop a clear roadmap on how to maximise the exploitation and monetisation of these resources for value addition to our economies.
“At the centre of this roadmap is a shared vision for the critical minerals with which our continent is endowed and thereby foster regional cooperation and economic growth, “Mantashe said.
He explained that, to realise this shared vision, the DMPR assigned Mintek the responsibility of coordinating the development of South Africa’s Critical Minerals Strategy with the intention to foster investment into exploration, beneficiation, building resilient local value chains, research and development, skills development and strengthening regional integration and international partnerships to position the country as a major player in the global critical minerals market.
“This focus ensured that minerals with the highest potential to drive economic and industrial growth are prioritised, which then provided guidance in determining the criticality of specific mineral commodities,” Mantashe said.
At least 21 commodity studies were undertaken in parallel with the work of determining the criticality of minerals. These commodity studies help to provide a clearer picture of the state of the mining industry in South Africa, as well as the contribution of each commodity to the country’s drive for inclusive economic growth, job creation and poverty alleviation.
Mantashe noted that valuable inputs into these studies were also obtained from the industry.
He pointed out that the strategy did not view critical minerals in isolation.
“Instead, they are treated as part of a larger ecosystem that drives essential technologies such as electric vehicles, hydrogen fuel cells, wind turbines, battery storage systems, microelectronics and advanced manufacturing,” he said.
Mantashe also gazetted Mineral & Petroleum Resources Development Bill which proposes to fundamentally overhaul the regulation of the industry, which has long complained about the bureaucratic hurdles that have to be overcome to operate.
The much-anticipated draft bill was approved by the cabinet last week together with the critical minerals and metals strategy, both of which Mantashe said.
Commenting on the amendments, the Minerals Council said that while it assisted the DMPR and Mintek “in the process of defining what constitutes a critical mineral” it had no role in developing the strategy. “The Minerals Council is in the process of reviewing the bill and the strategy,” it said.
The council expressed concerns in February that the amendments could threaten a High Court ruling that enshrined the “once empowered, always empowered” principle for mining companies who had complied with ownership targets.