Mining Indaba: Africa must shift to local mineral processing amid US trade aggression

Africa must process its minerals at home as de-globalization and a brewing US trade war threaten raw exports, the Investing in Africa Mining Indaba in Cape Town heard on Monday.Africa’s leaders demand a shift from exporting raw resources to local beneficiation. They want to capitalize on a growing supply gap in critical minerals as countries turn inward. Speakers at the forum, “Future-proofing African Mining, Today,” emphasized how Africa must transform raw materials into finished products. If not, the continent may lose economic value and control over its mineral wealth and its economic future.The need for local beneficiation intensifies against the backdrop of a mining sector under pressure. Last year, the South African mining industry contributed 6% to the nation’s nominal gross domestic product—down slightly from 6.3% in 2023. It exported goods worth about R800 billion ($42 billion), accounting for 45% of all merchandise exports.“We must invest in local beneficiation because it is a business decision, not a political one,” South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe, said.Mantashe challenged investors to weigh high export taxes and unreliable power against the potential gains from local mineral processing. He says companies often export raw commodities because doing so costs less than adding value at home.“If it costs less to export raw materials than to process them here, the market makes that decision. We must reverse that trend,” he warned.Marit Kitaw, of the Africa Minerals Development Centre in Addis Ababa, warned that the time for dithering has run out.“Africa must take ownership of its mineral wealth by processing it locally. This is not just about economic growth; it is about safeguarding our future against an unpredictable global trade environment,” Kitaw said.With global supply chains in flux and rising geopolitical risks, African leaders say that local beneficiation is a survival imperative, not just an economic strategy. Processing minerals in Africa can change the continent. It can shift from just supplying raw materials to generating a more industrialized economy. This will help protect its wealth and promote sustainable, inclusive growth for its people, the minister said.Opportunity to shineThe South African Minerals Council, an industry group, says mining must lower its costs to encourage more exploration.  The change would boost primary mining and encourage beneficiation when it makes sense commercially, Hugo Pienaar, the council’s chief economist, said during a media briefing.South Africa’s role as the G20 president now and summit host this November, gives the country leverage, Pienaar said.“There is a significant opportunity to showcase the country’s mineral potential and contribute to the global transition to a prosperous, low-carbon future,” he said.The forum also showcased practical reforms. Mantashe announced that his department is finalizing a new mining licensing system. It has international support to attract investment and speed up approvals. He stressed the country is taking strides to provide reliable, affordable power, which remains crucial for local beneficiation.“Investors, make your money here,” he urged. “When you profit, reinvest in our communities by building schools, clinics and infrastructure.”Sector under pressureThe industry contributed over R100 billion ($5.3 billion) to the government through corporate taxes, value-added tax and personal income taxes. It also directly employed 471,882 people in the third quarter of 2024. Yet, new data from the Minerals Council South Africa (MCSA) shows that logistical issues and lower non-gold commodity prices limited production gains.MCSA CEO Mzila Mthenjane says teamwork can lift these constraints. The government, state-owned entities and the private sector must work together.Mthenjane pointed to future milestones. These include a June launch of an online mining cadastre system. Also, a critical minerals list and strategy will be published, along with a revised Minerals and Petroleum Resources Development Act. These set the baseline for future growth and hope for global relevance.Unmatched mineral wealthMantashe underlined the economic potential of local processing by citing stark figures. South Africa supplies 73% of the world’s platinum group metals, 30% of global palladium and produces 7.2 million tonnes of manganese a year, 36% of global output.Gold mining in Africa’s most developed economy has declined. Production fell to 96 tonnes in 2023, and it employs 90,000 people. But, rising demand for other critical minerals presents a new chance.Samaila Zubairu, CEO of the Africa Finance Corporation, said local processing could boost industries, create jobs, and develop skills.“Instead of shipping out raw bauxite, we must focus on transforming it into alumina and aluminum right here in Africa,” he said.Downstream benefitsSome say local processing can strengthen supply chains. This is important as protectionism disrupts global trade. Martina Biene, managing director and chair of Volkswagen Group South Africa, noted the benefits downstream.“A robust beneficiation process stabilizes raw material costs and drives innovation in industries like automotive manufacturing,” she explained.Biene said a strong beneficiation process stabilizes raw material costs. It also drives automotive innovation, which contributes about 5% to South Africa’s GDP.She stressed that the automotive industry needs a steady supply of locally processed minerals — steel, aluminum, copper, lithium, cobalt and nickel — for vehicle production. This need is critical as the shift to electric vehicles accelerates.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com