The R60 billion industry bleeding South Africa dry

Illegal mining continues to grow strongly in South Africa despite efforts from the government and business to crack down. 

The illegal mining industry is now estimated to result in R60 billion in lost economic value every year, with over 6,000 abandoned mines forming the sector’s backbone. 

This industry has seen rapid growth, with PwC first reporting the losses from illegal mining to be R7 billion in 2017, meaning its impact on South Africa’s economy has grown by R53 billion in just eight years. 

In the financial services firm’s latest SA Mine report for 2025, it said illegal mining is a persistent and escalating concern in South Africa. 

The industry’s impact is becoming increasingly severe and widespread, threatening the well-being of communities near mining operations and posing serious risks to the cost and operational safety of legitimate mining operations. 

Apart from the economic losses, the rise of the sector has also begun to bleed state resources, with an already-tight law enforcement budget having to allocate additional spending to manage the issue. 

Mining companies, on the other hand, have spent hundreds of millions of rands to secure their facilities, protect employees, and ensure operational safety. 

An underappreciated consequence of the industry’s rise is a loss of revenue for mining companies and their resulting disinvestment from South Africa. This translates into retrenchments and rising unemployment.

The mining sector is one of the largest employers in the country due to its ability to absorb relatively unskilled labourers. 

“While data may vary, what is evident is that from 2017 to now, illegal mining is being tracked more closely, its impacts are better understood, and its footprint has expanded,” PwC said.

Historically, gold and diamonds were the primary targets of illegal mining activities due to the high value of the precious metal and stone. 

Over time, the focus has expanded significantly to include copper, chrome, and coal, as declining law enforcement capacity and the increasing value of these commodities have made them attractive targets. 

PwC said the issue is extremely difficult to address through traditional methods of law enforcement due to its dispersion across South Africa and the desperation of individuals involved. 

“At its core, illegal mining is a symptom of deeper socio-economic challenges facing South Africa and its neighbouring countries,” the firm said. 

This includes high unemployment, entrenched poverty, and lacklustre economic growth, which have fuelled a broader rise in criminality. 

One relatively simple solution has been proposed, which is to make it easier to open and operate a mine in South Africa. 

This would make it far easier to set up legitimate businesses that employ people and pay taxes to the South African government. 

It would also significantly reduce the 6,000 abandoned mines dotting South Africa’s landscape, which form the heart of illegal mining. 

What has been done

The government and big business have spent billions on tackling illegal mining in recent years, without much success. 

Law enforcement agencies have noted some improvements in cracking down on illegal activities since the launch of the nationwide Vala Umgodi initiative in 2023. 

Since December 2023, these agencies have reported 16,645 cases that have been opened, and 20,367 arrests have been made. 

To further this initiative, the South African Police Service has been allocated an additional R1.8 billion to acquire assets and deploy 4,302 personnel over 18 months to tackle illegal mining. 

PwC noted that little has been done to address the root cause of criminality and illegal mining, namely, a stagnant economy and rising unemployment. 

Much of the work in addressing, or at least limiting, illegal mining has come from mining companies, which have spent significant resources in securing their assets and protecting communities. 

PwC said most mining companies have responded to the rise in illegal mining through increased security measures and closer partnerships with law enforcement. 

Mining giant Sibanye-Stillwater noted in its 2024 factsheet that underground intrusions and theft of copper cables remain its biggest security threat. 

It reported that it dealt with 1,720 incidents of copper theft and incurred losses amounting to R53.4 million in 2024. 

Sibanye has had to spend millions more on increased security measures and collaboration with law enforcement services to employ new mitigation strategies. 

While copper cables have become increasingly attractive targets, illegal miners still remain fixated on gold and precious metals. 

Their high value makes it much more profitable and easier to illegally export and sell, due to relatively small amounts making it far simpler to move. 

In 2024, for example, Harmony Gold had to invest R650 million in security measures across the company’s mining operations. Of this investment, R647 million was spent in South Africa and only R3 million in Papua New Guinea. 

Harmony has implemented preventative measures to try to discourage illegal mining activities across its operations, rather than focusing on the recovery of stolen assets. 

Other producers have followed its example, with platinum miners such as Valterra investing heavily in drone technology for surveillance and security in South Africa. 

While these companies have invested heavily to prevent illegal mining and protect employees, this just adds to the difficulty of doing business in South Africa. 

“The losses extend beyond the value of stolen resources – they manifest in heightened security costs, disrupted operations, and the financial burden to curb these activities,” PwC said. 

“Communities are exposed to safety risks, the environment suffers irreversible damage, and the country forfeits critical investment opportunities.” 

PwC said these cumulative costs across business and government divert attention and resources from infrastructure development and broader challenges South Africa faces. 

“Tackling illegal mining is not just a matter of enforcement. It is a strategic imperative for sustainable development,” it said.