On the back of its immense wealth of critical minerals, South Africa is witnessing a shift in its mining landscape as demand for batteries and alternative energy sources present new opportunities for economic growth. South Africa is well-positioned to leverage its enormous reserves of platinum, manganese, vanadium, nickel, copper, lithium, graphite, rhodium, and rare earth minerals – as well as a skilled workforce – to capitalize on the growing international demand for critical minerals used for clean energy development.
Manganese – a mineral with wide-ranging applications – has witnessed a surge in local production over the past decade. Spearheading South Africa’s mineral industry, the country’s manganese sector accounts for approximately 36% of global production of the critical mineral. Manganese mining contributed $2.5 billion to South Africa’s foreign exchange reserves through export earnings in 2022, while contributing to the employment of over 14,500 people.
Critical for the manufacturing of lithium-ion batteries used for electrical backup systems and electric vehicles, analysts estimate a 10% surge in demand for manganese over the next decade. Additionally, in October 2023, South African energy company, Aqora, announced its plans to construct Africa’s first lithium-ion battery cell manufacturing facility. The Gigafactory will give South Africa the opportunity to produce battery cells at a lower cost than the U.S. or Europe.
With resources estimated at 298 million tons, the Mokopane Vanadium mine – situated in the Limpopo Province – represents one of the world’s largest primary vanadium resources. Meanwhile, the Vametco Vanadium mine and production facility holds resources measured at 182.7 million tons and recoverable reserves estimated at 45.3 million tons. Both mines are operated by South African mining company, Bushveld Minerals, which took complete ownership of the Vemetco mine in October 2023 and announced the planned expansion of the project’s current capacity of 5,000 tons per year to 8,000 tons per year. Widely used as an alloying element in steel production, vanadium is a crucial component in the construction, transportation, and manufacturing sectors, with production in South Africa poised to increase as new mines are commissioned in the country.
While local producers explore substantial unmined copper holdings in the country’s mineral-rich Northern Cape Province, major players in South Africa vie for copper mines across the continent in a bid to become Africa’s largest producer of the metal. In October 2023, Exxaro Resources, a Johannesburg-based diversified resources company, announced its plans to acquire copper assets in Botswana, Zambia, and the Democratic Republic of the Congo amidst the rising global demand for the critical mineral.
Rare Earth Elements
Recognized for its potential to play a major role in the development of a more diversified global supply chain of rare earth minerals, South Africa is home to all four permanent magnet rare earth elements, which includes neodymium, praseodymium, dysprosium, and terbium. All four elements can be found in the country’s Limpopo Province, which has attracted keen interest from investors due to their low cost of recovery and crucial role in the green energy transition. In November 2023, an extensive due diligence process confirmed South Africa’s Phalaborwa Rare Earths Project as one of the lowest-cost producers of rare earth oxides in development.