South Africa has one of the largest economies by GDP in Africa, though it is a dual economy, with some of the highest levels of inequality in the world. Mining has, of course, been a key industry in South Africa for centuries since the discovery of diamond (1867) and gold (1887) deposits. Alongside gold and diamonds other key mineral resources include chrome, ilmenite, manganese, palladium, platinum, rutile, vanadium, vermiculite and zircon. Though the mining sector’s contribution to GDP has shrunk to single figures in recent years, it still contributes more than 8% of GDP and employs in excess of 400,000 people. The Minerals Council of South Africa has expressed the intention to boost this figure to 12% – but with on-going regulatory and policy uncertainty it remains to be seen if this will be possible. Over the last 20 years, the sector has faced numerous challenges, not least because of rising resource nationalism and regulatory instability. Other issues have included skill shortages – in both the administration and the industry, the use of guidelines and charters to articulate mining policy rather than legislation – resulting in high levels of uncertainty, disaffected labour relations, issues with social licence to operate and an uncertainty and unreliability of power supply. These aspects have undoubtedly contributed to significant falls in exploration spend and caused some companies to divest operations to more favourable jurisdictions. It will take some considerable effort, and likely some extensive legal reform, to reverse this trend, though it is doubtful if the political and social environment will allow for the types of changes that are so desperately needed.
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