The term ‘mining’ often drums up images of dusty, dark tunnels, hefty pieces of machinery like drills and crushers and rubble filled with valuable minerals and materials. However, while these are commonly found, the industry in and of itself is a highly lucrative one, and in the process of becoming more and more streamlined, African countries can benefit hugely from their mining efforts.
Globally renowned for its sheer abundance of minerals worthy of mining, South Africa (SA), in particular, has gone on to become an industrial hotspot for the world’s mining industry. With a large portion of SAs economy centring on this, we’re taking a look at exactly how mining benefits Africa’s economy and the potential that it could hold.
The Mining Industry
On 05 October 2017, the Chamber of Mines president Mxolisi Mgojo announced during an address that “mining is the flywheel of the South African economy.” Claiming that mining could effectively lift other sectors when it is performing well but also risks pulling them down when it struggles, it was made clear to all in attendance that South Africa’s mining industry has a profound effect on how the rest of the country is performing. Every year, South Africa’s exported minerals have made up between 31% and 44% of its overall material exports, with gold, platinum group metals, iron ore and diamonds making a significant chunk of this.
The success and integration of the mining industry in Africa have given the country a fighting chance with their exports and industry overall. In fact, it has arguably given SA a standpoint in the stock markets, improved relationships with other countries and provided a wide variety of foreign investments that have built the region up to what it is today. There are around 1million jobs on offer through this industry and makes up an impressive 18% of the country’s’ overall GDP so, at its essence, this industry truly is holding up the economy in an incredible way. With most foreign companies operating here also offering their workers benefits like good food and fresh water, it’s simple to see why so many local people are opting to put their time into this kind of industry in return for investment back into their country and their local communities.
The Downfall
Despite the success and support that this particular market has offered, however, the industry in SA is facing a crisis. With falling profits devastating the country with every passing year, more and more investors and locals are starting to wonder whether mining can hold its own in SA any longer. With the likes of Tourism, Finance and Technology holding the potential to overtake mining and industrial sectors, South Africa’s very foundations are at the point where it could either recover or crumble and locals are desperate to work out which it’s likely to be.
While the mining industry is arguably under threat, there’s still no denying that it brings in a good chunk of SA’s GDP. Through foreign funding and the sale of materials, it still remains a solid pillar of SA’s economy and could continue to remain that way for years.
