Dark clouds gather over South Africa’s most important industry

South Africa’s investment in mineral exploration dropped for a seventh consecutive year, despite the government’s ambitions to arrest the decline.

While the country is Africa’s largest exporter of mineral products, companies are spending ever smaller amounts on prospecting to identify and define the mines of the future. Nations like Zambia and Democratic Republic of Congo attract a greater share of exploration capital that’s allocated to the continent.

Exploration spending in South Africa fell 5.3% to R738 million in 2025, according to data published this week by the government’s statistics agency using 2015 constant prices. Investment in prospecting has slumped more than 85% in the past three decades, the data show.

Minerals Council South Africa – the mining sector’s main lobby group – last month described exploration as the industry’s “lifeblood.”

Dwindling investment “is deeply troubling for our sector and it needs urgent attention,” said the organization whose members include Valterra Platinum, Harmony Gold and Exxaro.  

An underdeveloped junior mining and exploration industry is leading to the “effective collapse of the sector’s project pipeline,” according to a recent paper from the Cape Town-based Economic Research Southern Africa.

The government could revitalize prospecting by offering tax rebates, establishing a transparent database of available mining rights and increasing funding for geological mapping, it said.   

The Department of Mineral and Petroleum Resources published a new strategy last year which prioritizes restoring South Africa’s share of global exploration spending to 5%, up from current levels below 1%.

Despite gloom around the mining industry’s prospects in South Africa, the country remains a leading producer of multiple commodities including coal, gold, iron ore, manganese, chrome and platinum-group metals. Total mineral sales jumped 7.3% last year to 861 billion rand.