South Africa’s mining sector is under increasing pressure to move beyond its long-standing pit-to-port export model, where raw minerals are extracted and shipped overseas with minimal local processing. According to Chris Campbell, CEO of Consulting Engineers South Africa (CESA), this approach has supported the industry for decades but is now limiting national economic development.
Campbell argues that continuing to export unprocessed minerals significantly reduces South Africa’s ability to generate economic multipliers, skilled employment, and fiscal resilience, all of which are critical in a resource-driven economy.
He emphasizes the need for a decisive shift toward local beneficiation, where minerals are processed domestically into higher-value products, supported by infrastructure, industrial capacity, and engineering leadership.
Why Beneficiation Is Becoming an Economic Imperative
At the heart of the debate is the question of value creation. South Africa continues to export large volumes of low-value raw materials—such as chrome ore—while importing finished, high-value industrial products.
Campbell highlights the imbalance, noting that some ores are exported for as little as ZAR 48 per tonne, only to be re-imported in processed form at significantly higher value. This, he argues, represents a missed opportunity to build domestic industrial capacity and capture more value from the country’s natural resources.
A stronger focus on mineral beneficiation would allow South Africa to:
- Expand local manufacturing and processing industries
- Increase skilled employment opportunities
- Strengthen tax revenues and economic resilience
- Reduce dependence on imported finished goods
Volatile Mining Output Highlights Structural Challenges
Recent figures from Statistics South Africa reflect ongoing volatility in the sector. Mining production rose by 5.8% year-on-year in October 2025, supported by strong commodity prices, but then declined by 2.7% in November 2025.
Key contributors to the downturn included:
- Coal production weakness
- Reduced iron ore output
- Pressure on platinum group metals (PGMs)
- Fluctuations in gold production
These swings highlight persistent structural challenges, including high electricity costs, logistics constraints, and policy uncertainty, all of which continue to undermine long-term industrial stability and smelter competitiveness.
Energy Costs and Ferrochrome Sector Relief Measures
One of the most significant recent developments has been the approval by South Africa’s energy regulator Nersa of a reduced electricity tariff for major ferrochrome producers, including Glencore-Merafe and Samancor. The tariff was lowered from 136c/kWh to 87c/kWh, effective for 2026.
While the move is intended to protect jobs across the mining and metals value chain, Campbell cautions that the long-term funding implications remain unclear. Energy pricing is a critical factor in raw materials processing, particularly for energy-intensive industries like ferrochrome smelting. Without competitive electricity costs, local beneficiation remains difficult to sustain.
The Economic Case for Local Processing
Campbell argues that the benefits of beneficiation are substantial and measurable. For example, processed ferrochrome can achieve values of around ZAR 1,200 per tonne or more, far exceeding the returns from raw ore exports.
A stronger domestic processing sector would:
- Expand the national tax base
- Create higher-skilled industrial jobs
- Strengthen downstream manufacturing industries
- Increase export revenue per tonne of mined material
South Africa’s government has repeatedly highlighted beneficiation as a strategic priority through its Critical Minerals Strategy, but implementation remains the key challenge.
Commodity Price Surge Creates a Narrow Opportunity Window
A surge in precious metals prices during late 2025 has created what Campbell describes as a potential ZAR 350 billion revenue opportunity for the mining sector. He argues that this window should be used to reinvest in domestic processing infrastructure, rather than continuing to focus primarily on raw exports.
Priority minerals for beneficiation include:
- Manganese, essential for steel production and battery technologies
- Platinum Group Metals (PGMs), critical for catalytic and hydrogen applications
- Gold, which remains a key financial and industrial asset
Campbell stresses that development should progress gradually from primary beneficiation to fully refined, high-value products.
New Mining Projects Signal Gradual Industry Recovery
One encouraging development is the commissioning of Qala Shallows in October 2025, South Africa’s first new underground gold mine in more than 15 years.
The project demonstrates that renewed investment is possible when global commodity prices align with operational readiness. It also signals potential for further exploration and production growth if structural barriers are addressed.
Energy Transition: The Foundation of Industrial Growth
Campbell emphasizes that beneficiation cannot succeed without reliable and affordable energy.
He calls for a multi-pronged energy strategy that includes:
- Improved performance and efficiency at Eskom
- Faster rollout of independent power producers (IPPs)
- Consideration of small modular nuclear reactors as long-term baseload solutions
Stable electricity supply is essential for supporting mineral processing, smelting, and industrial manufacturing ecosystems.
Fixing Structural Barriers: Policy, Exploration, and Governance
Beyond energy, Campbell highlights the need to address systemic barriers to mining investment.
These include:
- Reducing regulatory delays in exploration and project approvals
- Increasing collaboration with empowerment partners to share risk
- Strengthening governance and tackling corruption
- Ensuring policy stability and long-term investment certainty
- Closing infrastructure gaps that hinder industrial expansion
Without these reforms, South Africa risks limiting its ability to attract new mining and processing investments.
Logistics and Infrastructure: A Critical Enabler
Transport infrastructure is another key pillar of beneficiation strategy. Recent developments such as Transnet’s Memorandum of Understanding with the Port of Antwerp-Bruges and APEC (signed January 2026) are seen as positive steps toward modernizing port operations and improving export efficiency.
However, Campbell stresses that logistics improvements must go further. The ultimate goal should be a fully integrated system that supports a pit-to-plant-to-market value chain, ensuring that raw materials are processed locally before export.
Engineering Capacity as the Backbone of Industrial Growth
Consulting engineers, Campbell argues, are central to enabling this transformation.
Engineering firms within CESA contribute by:
- Designing resilient mining and industrial infrastructure
- Conducting risk assessments for complex projects
- Supporting large-scale beneficiation plant development
- Integrating mining operations with supporting energy and logistics systems
He also highlights the importance of developing local talent and inspiring the next generation of engineers. Events such as the Mining Indaba provide a platform to showcase opportunities in mining engineering, beneficiation, and industrial development—helping retain skilled professionals within South Africa.
From Raw Exporter to Global Value Creator
Campbell concludes that while South Africa’s mining sector has shown encouraging momentum in 2025, momentum alone is insufficient.
The country’s long-term success depends on a coordinated strategy that combines:
- Political commitment to beneficiation
- Reliable and affordable energy systems
- Efficient logistics infrastructure
- Strong engineering and technical capacity
- Stable regulatory and investment frameworks
If these elements align, South Africa can transition from being a raw materials exporter to a global leader in mineral value addition, unlocking far greater economic and industrial potential from its vast natural resource base.
