As developed economies seek to diversify their sources of critical minerals away from China and Russia, South Africa has the “clear potential” to strengthen its position as a key supplier of critical minerals, such as platinum-group metals, vanadium, manganese, copper and nickel, according to a White Paper published by management consulting firm Boston Consulting Group (BCG).

The report – titled ‘An untapped goldmine: opportunities for South African mining’ – also points to early exploration results indicating potential endowments of future-relevant resources, such as cobalt and magnesium.

BCG MD and partner Tycho Möncks explains that South Africa is in “a leading position” regarding manganese production, with over 30% of global supply coming from the country, equating to about 650-million tons of resources out of an estimated global 1.5-billion tons.

He contends that the country can further build on this important position, given it provides geopolitical and low-risk advantages as opposed to, for example, China, which produces about 15% of global manganese.

“Given that only around 25% of supply is coming from ‘safe’ jurisdictions, such as Australia, South Africa has the opportunity to enhance its market share and cement its market leadership position.”

Manganese is a component of the cathodes in nickel-manganese-cobalt batteries – the dominant lithium-ion energy storage technology used in electric vehicles (EVs).

Möncks says that, while battery original-equipment manufacturers (OEMs) are focusing their sourcing efforts on lithium, nickel and cobalt for use in batteries, demand for manganese is likely to increase.

The increase can be attributed to the mineral being crucial for OEMs to secure a reliable feedstock that also complies with the environmental, social and governance factors associated with a company.

“For batteries, certain quality parameters and specialised processing are required. South Africa could position itself as the prime supplier of those,” he adds.

Despite opportunities presented by the manganese mining sector, BCG’s report indicates that the local industry still faces significant challenges.

Two such challenges are unreliable, costly and carbon-intensive electricity, as well as deteriorating transport infrastructure.

Moreover, the report notes that the domestic sector is not cost competitive, owing to structural and economic issues, while policy uncertainty and a poor perception of South Africa by outsiders have also negatively affected the sector.

Hence, large-scale investments and strategic partnerships are necessary to “unlock the value at stake in the mining sector” and, amid a global energy transition, South African mines are urged to adopt more reliable electricity sources such as renewable self-generation.

Meanwhile, to increase the country’s competitiveness in international markets, new technologies and advanced analytics can improve productivity and recovery, conserve mining operations’ competitiveness, and ensure that mines are commercially sustainable.

“Embracing the digital transformation will allow the mining sector to remain a sustainable employer in South Africa and advance towards higher-skilled job profiles and safer working environments,” the report indicates.

“Innovation will play a major role in sustaining the competitiveness of South African manganese mining operations,” Möncks concludes.