With an estimated $2.5-trillion worth of proven mineral reserves, South Africa’s mining sector remains a major player in the country’s economy, despite weak commodity prices, making a direct contribution of around 8% to gross domestic product and providing 14% of total employment, according to business intelligence provider Oxford Business Group (OBG).

OBG’s ‘The Report. South Africa 2016’ states that the challenging external climate continues to weigh on the industry, with the current downward cycle expected to stretch well into 2016. Internal issues, such as power disruptions and infrastructural shortfalls, have piled added pressure on operators.

The report cites Kumba Iron Ore CEO Norman Mbazima as saying that South Africa’s mining companies are targeting greater efficiency across the board in operations, manpower, equipment productivity and supplier rates, and that improvements in transport infrastructure would support their efforts.

“Currently, all iron-ore goes through the Saldanha port facility, which is owned by Transnet,” says Mbazima, explaining that Kumba Iron Ore would like to see a coordinated capacity expansion of the railway and the port itself.

Mbazima is upbeat about technological developments but is quick to add: “However, emerging companies will need assistance if they are to fill any voids left by multinational companies.” He adds that mining is capital-intensive. “The industry is in need of assistance, and the entire mining chain should be closely examined to implement a new beneficiation strategy.”

Government is keen to develop key mining value chains in iron-ore and steel, platinum-group metals, polymers, titanium and mining inputs. However, its efforts to step up beneficiation have come up against hurdles in the past and proved controversial. In its report, OBG considers the options available to South Africa’s leaders as they contemplate a longer-term solution.

Department of Mineral Resources minerals policy deputy director-general Mosa Mabuza notes that most products probably have at least five different steps in the full value chain. “Our goal is not to develop all at once, but rather one step at a time.”