Challenges facing Africa's mining industry

The African mining industry is a cornerstone of the global economy, yet it stands at a critical juncture. For McKinnon Chain, an organization built on supplying the essential chain that

makes the mining world turn, understanding this landscape is paramount. The challenges are clear, but the path forward demands strategic resilience and locally sourced solutions.  

South Africa: A Powerful Engine Facing Headwinds

When the world considers South Africa's resources, its mining industry immediately comes to mind. The sector's financial impact is immense: After this year’s Mining Indaba, Mining Weekly¹ reported that this industry contributed 6% of the country’s total nominal GDP during the first three quarters of last year. In money terms, this amounted to R432.7 billion. 

In 2024, 45% of the country’s exports consisted of minerals worth about R800 billion. The mining industry paid 14% of all corporate taxes in South Africa (totalling R42.6-billion) during the  financial  year 2023/24. During the third quarter of last year the sector employed 471 882 people, or 4.5% of the country’s total workforce. The earnings of these employees totalled R189.2-billion, or 5.7% of the country’s total workforce earnings. 

Although these positive statistics show improvement, it is also important to be aware of the challenges the mining industry face. Challenges like job losses that continue to mount, particularly in the platinum group metals sector, where nearly 10,000 jobs⁴ have been lost due to declining metal prices.  

Natural Factors Impact This Precious Industry

The Carbon Trust ² shares that water scarcity is a major concern, as prolonged droughts can disrupt extraction, affect ore processing, and drive up operational costs. Mines that use water-intensive methods are especially vulnerable. Flooding and severe storms also damage essential infrastructure like roads, railways, and ports, leading to production disruptions and higher capital costs. 

This is particularly concerning for South Africa, as a 1.5°C warmer world globally will translate into a 3°C rise in southern Africa. This makes South Africa’s mining sector more exposed to the physical risks of climate change compared to the global average. 

The Carbon Trust primarily offers expertise and guidance to help organizations reduce their carbon emissions and transition faster to a low-carbon, sustainable economy. 

Mining Investment Hurdles and Funding Solutions

Many international companies cite concerns over long waiting times for mining licenses and other regulatory issues, contributing to low investor sentiment. 

Although South Africa has considerable untapped minerals resources, Mining Review Africa³ have reported that investment in the mining sector has been a concern. Experts suggest exploring alternative funding methods like streaming, where companies provide upfront capital to mines in exchange for purchasing minerals at a discount once operations begin. 

Is Mining Production Back to Pre-Pandemic Yet?

Sadly, no. Although 2024 saw minor improvements ⁴, mining production remains below pre-pandemic levels, underscoring the urgent need for policy reforms and strategic interventions. 

The Minerals Council South Africa (representing 90% of the country’s mineral production) has identified critical roadblocks including high crime rates, deteriorating water infrastructure and escalating electricity tariffs. The way forward demands a shift toward electrification, energy efficiency, and alternative power sources, including hydrogen, smart grids, and battery storage. 

A Wider Look Across The Continent

Challenges are not unique to South Africa. Across the continent, mining contributes an estimated 4.5% to Africa’s gross domestic product (GDP), with more than a third of exports coming from the industry. 

Persistent infrastructure deficits cause delays, extended costs, and logistical headaches due to insufficient transportation, electricity, and water networks. Insufficient housing, healthcare, and academic facilities impact staff’s well-being and strain relationships with local communities. Furthermore, the adoption of advanced technologies is hindered by a lack of telecommunications infrastructure and regulatory delays.⁵ 

The mining industry stands at a pivotal moment, and its future will be shaped by its ability to embrace sustainability, operational efficiency, and innovation. For every mining operation to succeed, it must rely on essential infrastructure and materials that can withstand these extreme challenges. 

Choosing to use high-quality, locally manufactured mining chain is one of the many critical decisions that contributes to the resilience of this precious industry. 

At McKinnon Chain, we understand that our products are literally the sinew holding vital operations together. While global pressures and regulatory uncertainties remain, strategic investments in reliable, robust, and locally sourced equipment—like our mining chain—will be key to defining long-term success and ensuring this essential sector can power through the next decade. 

Resources

1. Mining Weekly- Mining still major contributor to South African economy 

2. The Carbon Trust - Impact of climate change on South Africa's mining industry, what are the risks and opportunities for business

3. Mining Review Africa - Challenges exist but opportunities abound

4. The South African Institute of Mining and Metallurgy - The Mining Industry in 2025: Challenges, Innovation, and the Road Ahead 

5. Mining Review - Strategies to address persistent challenges