It is revealing that the government’s Davos team — swaddled in this year’s set of South African scarves — did not include any input from Gwede Mantashe’s department of mineral resources & energy (DMRE) ahead of the annual Swiss jamboree.
The common message that finance minister Enoch Godongwana and his colleagues from the departments of communications, health, higher education, trade & industry and electricity are taking to the World Economic Forum is the refrain South Africa peddles every year: that we remain “open for business” and “committed to creating a conducive environment”.
Godongwana went further in a pre-trip briefing, describing South Africa’s investment case as “compelling” and waxing lyrical about our status as an industrial stalwart of the continent.
Yet, by almost any metric — relentless power cuts, broken railways, a dysfunctional visa system or rampant criminality — an industrial stalwart is not what we are. And judging by the spectacular failure of Mantashe’s department to finalise a single one of the mining applications filed since March 1 2023, the doors to investment are far from wide open.
In response to questions in parliament, Mantashe’s department revealed that of the 2,525 applications for mining rights and permits lodged since the start of financial 2024, precisely “none” has been finalised.
The department argues that this state of affairs is largely attributable to the delay in finalising environmental impact assessments for those applications, and it did actually finalise thousands of applications from previous years in recent months.
Yet it’s hard to ignore the fact that Mantashe’s department still has a backlog of 4,486 applications, according to an analysis by the Daily Maverick’s Ed Stoddard.
Despite our mineral wealth, South Africa now draws less than 1% of global exploration spend — down sharply from the 5% we got in 2004
That’s an inconvenient message for President Cyril Ramaphosa’s team at Davos, undermining as it does his claims of a “capable, responsive state”.
Some analysts suggest that Mantashe’s department, far from getting on top of the backlog that was first highlighted three years ago, appears to be slowly vanishing beneath the load.
It’s one of the reasons that the country, once a global mining powerhouse, is far less attractive than other countries for greenfield mining operations. Despite our mineral wealth, South Africa now draws less than 1% of global exploration spend — down sharply from the 5% we got in 2004. And while in 2002 South Africa snapped up 35% of all exploration spend on the continent, today that figure is less than 8%.
It’s a desperate indictment of how local and offshore mining firms see our prospects. Mantashe isn’t oblivious to this — in 2019 he promised that South Africa would recover its former levels within five years, yet we’ve only slipped back.
This apparent implosion of capacity at the DMRE, alongside the years of regulatory uncertainty that accompanied the state’s mining charter, is one reason mining’s contribution to GDP plunged from 10% in 1993 to just over 4% in 2022.
This plunge, Anglo American director Themba Mkhwanazi said last year, has “obliterated economic progress and deepened the plight of the most vulnerable”.
Yet, as Daily Maverick reports, efforts to establish a new and technologically robust mining cadastre to better process mining applications seem to have hit a wall. And at current rates, the backlog, according to consultant Paul Miller, will take more than 16 years to clear.
The DMRE’s silence over the matter — weeks before the mining indaba meant to showcase our pulling power — is dismaying, even if it speaks volumes about the indifference Mantashe, and some of his cabinet colleagues, feel for the constituencies they are meant to advance.
The theme at this year’s Davos jaunt is “rebuilding trust”. Yet Godongwana and his team are fighting against themselves, and the cognitive dissonance of the government they serve, in their drive to sell South Africa.
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