Ramaphosa celebrates BEE, which crushed South Africa’s most iconic industry

The Solidarity Research Institute (SRI) has released a report detailing how Black Economic Empowerment (BEE) and other transformation policies contributed to the severe decline of South Africa’s mining industry.

This comes after President Cyril Ramaphosa celebrated these policies, saying South Africans must look at the mining sector to see how BEE has been successful in alleviating poverty and creating jobs.

In a recent question-and-answer session in Parliament, DA MP Toby Chance claimed that bad ANC policies, including Broad-Based BEE (BBBEE), have led to increased state debt and less job creation.

In response, Ramaphosa defended the policy, saying BBBEE has helped open industries to those who were previously excluded.

He specifically highlighted BBBEE’s impact on the mining industry, explaining that many black people now work in this industry, both as mine workers and owners of mining companies.

“Today, that industry has more black entrepreneurs. Black mining companies, some of them are the biggest,” he said.

The President went as far as to say that those questioning the positive impact of BEE policies, and those who call for their abolishment, should be ashamed of themselves.

However, the SRI’s latest report, titled Mining Mischief: How transformation killed the golden goose, argues that BEE has done more harm than good for the local mining industry.

The report details the critical role mining has historically played in South Africa’s economy. The country is exceptionally rich in resources and has benefited immensely from this since the 1850s gold rush.

“However, at present, mining is a much smaller part of the South African economy than it used to be, despite mineral prices surging in recent years,” the SRI said. 

The report’s data indicates that mining production has plummeted over the past decade, and even just the past five years.

Mining production in 2025 was 6.4% lower than in 2019, and 2026 is currently on track to be 12.5% lower.

This declining production has also seen a decline in the mining industry’s economic contribution, which peaked in 1980 at 21%.

Employment in the mining industry has followed a similar downward trend, declining from 613,000 people in 1994 to less than 500,000 today.

BEE to blame, says Solidarity

The SRI’s report argues that policy failures are one of the main contributing factors to the mining industry’s decline.

This includes policies’ impact on electricity prices, which have skyrocketed over the past few decades, and on mineral rights.

The report specifically points to the 2002 Mineral and Petroleum Resources Development Act, which granted the state custodianship over all mineral resources in the country.

A 2018 charter, the report said, took this further by increasing equity targets to 30%, to be shared between employees, the host community, and BEE entrepreneurs.

This charter also increased the requirement for prospecting rights, detailing that only entities with 50%+1 black ownership may receive licences for mineral prospecting, as well as requirements related to procurement.

“The effect of the state administration of mineral rights, coupled with harsh licensing and operating requirements, leads to it being nearly impossible for new mines to be opened or for operations to expand,” the report said. 

“Besides the restrictive nature of the state’s custodianship, it also claims a royalty for all minerals that are extracted.” 

“Unlike other taxes, mines need to pay this royalty regardless of their profit/loss position. This greatly increases risk in an already risky sector.”

To make matters worse, the report argues that, aside from harming investment in the industry, these policies have also had limited success in terms of their own goal – transformation.

It referred to a 2015 Chamber of Mines report, which stated that only 46 people received 60% of the total mining BEE value in South Africa.

“Moreover, transformation has shown very little real success, and a handful of black elites, rather than ordinary or black workers, have benefited,” SRI head Theuns du Boisson said. 

“A total of just 46 people received the overwhelming majority of the benefits, while workers received a mere 15% of BEE funds.”

Du Boisson said that, while other countries have managed to expand their mining sectors over the past decades, South Africa’s has stagnated. 

“Among other things, the President praises the policy that strips landowners of mineral rights, even though it is precisely this policy that contributes to the industry’s paralysis,” he said.

“If the President wants to find a BEE success story somewhere, he will have to look elsewhere. Because he certainly will not find it in mining.”