Sector has challenges to overcome

According to the E&Y Top 10 Business Risks and Opportunities for Mining and Metals in 2024 report, miners will need to navigate a complex operating environment over the next 12 months.

The commodity boom has fizzled out, and the sector is struggling to secure capital to fund expansion due to tighter financial markets amid the complex global economic landscape. In SA, the sector is grappling with challenges that hamper efficiency, raise costs and constrain exports.

“Negative headlines dominate the local news cycle as persistent power cuts, logistics challenges, the slow pace of legislative reforms and labour instability negatively impact the sector,” says Nivaash Singh, Co-Head: Mining and Resources at Nedbank CIB.

In response to the energy challenge, many mining companies are taking steps to secure energy supply through self-provisioning, says Lucas Chaumontet, MD and Partner at BCG Johannesburg.

“These companies are either investing in renewables for their operations or in partnership with other entities. Some are even creating new businesses around renewable energy.

“Mining companies are also investing in energy storage solutions through batteries and pumped hydro to make renewable capacity more effective,” says Chaumontet.

Adds Singh: “Illegal mining and mine fatalities are additional issues facing the local sector, with a need for greater focus on improved health and safety.”

Furthermore, community tensions over mining rights, labour unrest and concerns about the environmental impact of operations continue to impact the sector, and a lack of skilled workers in mining-specific fields and technology-driven roles hinders productivity.

Despite these challenges, the mining sector in SA is forging ahead and making a positive contribution, believes Singh.