The month before Mining Indaba, the 2021 Fraser Institute's annual survey of mining companies ranked South Africa 75th out of 84 countries included in its Investment Attractiveness Index. High commodity prices are not protecting South Africa's mining industry against its enduring challenges, most centrally energy and logistics woes.

Infrastructure “...needs to be improved and changes need to be made for the sector to reach its true potential” noted South African President Cyril Ramaphosa during his address at the 2022 Mining Indaba. South Africa's rail, port and pipeline are operated through government-owned Transnet. According to the Minerals Council of South Africa, in 2021 as much as US$3Bn worth of contracted volumes couldn’t reach ports – directly related to railway capacity challenges. One of the country's infrastructural shortcomings is highlighted by the manganese corridor, which is planned to get ores from Hotazel in the remote Northern Cape to Gqeberha (Port Elizabeth) for export (some 1,000km away). Transnet’s latest rail development plan targets a > 20Mtpy capacity for manganese exports from 2040, while UN Comtrade data shows over 19.5Mt of exports already reached in 2019.

The second major woe sits with energy insecurity and the country’s government-owned energy utility, Eskom. While much of the rest of the world is focused on reducing energy consumption, South Africa’s reality is one of repeated load-shedding (rolling blackouts) due to energy shortages and the need for more supply. The government emphasised that South Africa’s energy supply “...needs regulatory and policy reform to facilitate new electricity generation opportunities”. The question remains if energy reform is "too little, too late" for energy-intensive operations such as ferroalloy smelters, which have lost cost-competitiveness in part as a result of energy supply issues. South Africa’s bulk alloys economy is now mostly supported by exporting abundant domestic ores (chromite and manganese) to Chinese ferroalloy producers, rather than producing more ferroalloys domestically.

Many conversations around energy in South Africa at the Indaba tended to pivot towards hydrogen. South Africa wants to become a major producer and exporter of green hydrogen, capturing a 4% global market share by 2050. A good deal of focus is on the “hydrogen valley/corridor” from Limpopo through Gauteng to KwaZulu Natal, which will facilitate the conversion of trucks from diesel to fuel cells. Anglo American’s unveiling of the hydrogen-powered truck at itsMogalakwena mine has also caused great excitement. South Africa's focus on hydrogen is understandable. The country has several assets relevant to hydrogen: expertise in the Fischer-Tropsch process, abundant renewable energy resources, and major production capacity for PGMs used in fuel cell technology. While a focus on the future and hydrogen is important to help decarbonise the economy, create economic growth, and pursue a just transition away from coal, South Africa's Government must not ignore the energy and logistics issues of today.

23

23

20

20

19

19

18

18

17