'High energy costs, failing rail threaten future of SA mining'

The Minerals Council South Africa says the country's mining sector is facing mounting pressure from escalating energy costs, weak logistics performance and declining exploration.

Minerals Council CEO Mzila Mthenjane warned that transmission bottlenecks now threaten renewable-energy investments, while Transnet’s rail performance has forced mines to scale back production.

"When Transnet falters, as it has in the past, that resulted in a lot of these mining companies having to reduce their production capacity to be on par with the rail capacity. It's had a significant impact."

He also raised concerns about illegal mining syndicates, which have created safety and reputational risks for the industry. 

Mthenjane emphasised that the new Minerals Resources Development Bill could help by easing exploration rules and clarifying environmental processes, but warned that ongoing delays to the mining cadastral system were shaking investor confidence.

"We remain cautiously optimistic, but I think we're soon going to be bouncing against this boundary of disappointment. But hopefully we don't get there."

To listen to Mthenjane in conversation with 702's Clement Manyathela, click below: