South Africa cannot afford another decade of mining decline – IRR

The legal framework that has driven investors and jobs out of South Africa’s mining sector can be fixed – but only by fundamentally reforming how mining rights are granted and held.

This is the message delivered by the Institute of Race Relations (IRR) in a webinar today on its draft Growth and Employment in Mining (GEM) Bill. In the webinar, IRR Head of Policy Research Dr Anthea Jeffery and Projects and Publications Manager Terence Corrigan set out the case for overhauling the legislation that governs this sector.

Mining's contribution to GDP has slid from 21% in 1980 to around 7% today. The sector shed an estimated 55,000 jobs between 2008 and 2025, while exploration spending collapsed from R6.3 billion in 2006 to roughly R738 million in 2025 – a clear signal, the IRR argues, that investors are taking their capital to jurisdictions where rights are more secure and outcomes more predictable.

The GEM Bill is intended to demonstrate an alternative. Rather than centring mining rights decisions on broad ministerial discretion and ownership transfer requirements, the Bill places technical capacity, financial resources, safety compliance, environmental obligations and land rehabilitation at the heart of awarding and renewing rights.

In explaining the failure of the current system which prioritises Black Economic Empowerment, Jeffery noted: “The great majority of black South Africans gained nothing from these deals. What they did find was that mining, one of our core industries, was no longer attractive to outside investors, the jobs were shrinking, and that there was less opportunity in mining than there had been before.“  

South Africa has a choice: reform the legal framework that governs mining or continue watching the sector – and the jobs and investment it could sustain – slip away. The GEM Bill shows that the first option is both available and achievable.

Media contact: Terence Corrigan IRR projects and publications manager Tel: 066 470 4456 Email: terence@irr.org.za
Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za