South Africa’s water crisis threatens mining industry

South Africa’s water crisis is threatening one of the country’s largest industries, mining, and, by extension, the economy.

Economist Bongani Mahlangu told SABC that the crisis needs speedy intervention to prevent affecting sectors that are key economic drivers.

South Africa faces a water crisis due to deteriorating infrastructure and dysfunctional municipalities. It results in high levels of wastage and inefficient use of scarce resources, with water outages on the horizon.

Wits Professor Tracy-Lynn Field told Newzroom Afrika that many of South Africa’s dams are at sufficient levels, yet taps are running dry because of deteriorating infrastructure and dysfunctional municipalities. 

One of the sectors that will undoubtedly feel the impact of water shortages is mining, where production is heavily dependent on water.

“In the upstream, water would be used for mineral separation, drilling, cooling, managing of dust and processing. Equally, in the downstream or the byproduct of mining, you would still use water for storage of minerals and further processing,” Mahlangu said.

“That indicates how important water is as an input in production and that without water, production cannot take place or take place adequately.”

He said that if the mining sector is affected by this challenge, the results for the country’s economy would be dire, as the industry is a significant contributor to the country’s GDP.

Mining analyst Peter Major recently said that job losses are set to continue at South African mining companies as the sector faces significant headwinds from an inconsistent electricity supply, water shortages, and deteriorating logistics preventing them from getting their products to market. 

Major told Business Day TV that the government must realise that unemployment and poverty will rise if it does not address these problems quickly and adequately. 

He was speaking about the release of third-quarter production data from Anglo American Platinum (Amplats) and Kumba Iron Ore. 

For the third quarter, Kumba’s production declined by 12% compared to the year before, while Amplats’ plunged by 9%. 

Major said the biggest factor contributing to these numbers is the macroeconomic environment in which these miners operate. 

In particular, Amplats experienced a five-day water stoppage at its Rustenburg operations, which caused its production and sales to decline 9% in the third quarter. 

These companies are as reliant on Eskom, Transnet, and local governments for water supply as the average citizen in South Africa. 

While they can mitigate the effects more successfully, they will not be able to do so for much longer.

Mahlangu said that, apart from the mining industry, South Africa’s economy as a whole will be affected by the water crisis since production hours will be lost.

“When there’s no water in your workplace, you tend to go home. When you go home early, those are hours of production or productivity that have been lost,” he explained.