Between 2001 and 2008, the longest sustained commodity boom in recent history, South Africa’s mining industry contracted at roughly 1% a year.
According to the National Development Plan 2030, its top 20 competitors grew at an average of 5% a year. The country’s declining competitiveness is best captured by the results of the 2013 Fraser Institute Survey of mining exploration investment attractiveness. It placed South Africa 64th out of 112 global mining jurisdictions. Botswana ranked 25th, Namibia 34th and Ghana 43rd. South Africa possesses the most valuable in situ mineral reserves in the world (valued at $2.5 trillion). Any reasonable forecast would suggest that such wealth should drive rapid economic growth. Instead, the International Monetary Fund has lowered its South African growth forecast to 2.8% for 2014. Meanwhile, new players are entering the market as several major mining houses reduce their exposure to South Africa. This briefing analyses the implications of these dynamics.