Minerals Council South Africa has expressed concern about South Africa remaining poorly rated as a mining investment jurisdiction in the latest Fraser Institute Survey of Mining Companies.

The survey ranks South Africa in the bottom ten global mining jurisdictions for the second consecutive year.

While South Africa placed 75 out of 84 jurisdictions last year for overall investment attractiveness, this year the country ranked 57 out of 62. Last year had been the first time South Africa ranked in the survey’s bottom ten.

The Minerals Council will meet with the Department of Mineral Resources and Energy (DMRE) about the reasons behind the low ranking, which include infrastructural constraints in electricity and rail, the availability of skilled labour and government’s lack of enforcement of existing regulations, coupled with having regulatory duplication. 

CEO Roger Baxter says the council will engage with government on each of the 15 areas of the survey to address the underlying causes and propose potential solutions.

A positive step in the mining sector has been the DMRE’s issuing of a tender for a new cadastral system, which will replace the existing dysfunctional South African Mineral Resources Administration System.

“It is critical to have a transparent, off-the-shelf, proven and online cadastral system to encourage investment in exploration, and to expedite the processing of prospecting and mining right applications.”

In 2020 and 2019, South Africa ranked 60 out of 77 jurisdictions and 40 out of 76 jurisdictions, respectively, for investment attractiveness. 

This Investment Attractiveness Index is weighted 60% by mineral potential and 40% by policy perceptions.

The Fraser Institute Survey of Mining Companies is published every year, capturing the mining industry’s perceptions of the investment potential of global mining jurisdictions based on mineral potential and government policies.

In the Policy Perception Index, South Africa slipped to 53 out of 62 jurisdictions in the latest survey, compared with a position of 65 out of 84 jurisdictions the prior year.

In the Mineral Attractiveness Index, the country ranked 41 out of 47 jurisdictions in the latest survey, compared with a ranking of 77 out of 84 jurisdictions the prior year.

Baxter says it is disappointing that South Africa remains poorly perceived as a global mining jurisdiction, but admits there are fundamental problems in South Africa that need to be addressed.

In the same release, Baxter lauds the encouraging progress government has made on energy reforms, with the establishment of the National Electricity Crisis Committee and enabling of greater private sector investment in electricity generation.

He adds that the Minerals Council is also working closely with State-owned freight utility Transnet to stabilise rail operations, which includes help in curbing crime and corruption.

Additionally, Baxter welcomes government’s recent establishment of the National Logistics Crisis Committee, which aims to address the rail and ports challenges.