During the 2001-08 commodities boom, the world’s top 20 mining countries achieved an average mining growth rate of 5 per cent a year, but South Africa’s sector shrank by 1 per cent a year, according to the country’s Chamber of Mines. Only Venezuela, where leftwing president Hugo Chávez is nationalising large swatches of the mining industry, came close to matching that poor result.
…The reasons for the frustrated mood are numerous and vary according to the country’s rich basket of commodities. The decline is partly the result of the maturing nature of South Africa’s gold mines, which are getting deeper and more expensive to mine. Over the past 10 years annual production has halved to 192 tons. In 2008, the country was eclipsed by China as the world’s biggest gold producer, ending more than a century of South African dominance of the industry. Since then it has slipped to fifth place as Australia, the US and Russia have also overtaken South Africa.
Beyond gold, other factors are stymying the potential of the rest of the commodities sector. These include rising production costs, particularly labour and electricity, and infrastructure bottlenecks such as railway capacity for bulk commodities.
But…The most conspicuous cloud hanging over the industry has been an increasingly feisty debate about the nationalisation of mines, prompted by ever louder calls by Julius Malema, the radical leader of the ruling African National Congress’s Youth League, for the state to take control of the sector.