PERTH (miningweekly.com) – The South African government is committed to resolving the barriers to investment in the country in the "shortest possible time", special adviser to the Mineral Resources and Energy Minister, Gwebinkundla Fellix Qonde, said in Perth on Thursday.

Speaking on the second day of Paydirt’s Africa Downunder conference, Qonde acknowledged the Fraser Institute’s recent ranking of South Africa as one of the least attractive jurisdictions for mining investment, with the country coming in fifty-seventh out of the 62 jurisdictions ranked.

Based on the policy perception index, the country also ranked amongst the bottom ten performers, next to Mongolia and the Democratic Republic of Congo.

“The recent Fraser Institute survey has not ranked South Africa favorably due to some constraints in electricity, rail and port systems. But let me hasten to assure you that the Department of Mineral Resources and Energy is working closely with various stakeholders to address and resolve these factors that impede the growth in our sector,” Qonde said.

“There is no doubt that the South African mining sector will improve with the rankings on both indexes if these constraints can be resolved in the shortest possible time, which we are all committed to doing.”

The mining industry’s contribution to gross domestic product amounted to around 7.53% in 2021, and with production in 2022 valued at R1.18-trillion, up from the R1.1-trillion in 2021.

Figures from the South African Revenue Service suggested that the mining sector contributed R89-billion in corporate tax in the 2021/22 financial year, while royalties stood at R28.45-billion in the same period.

The mining sector created around 23 562 jobs between 2021 and December 2022 resulting in overall employment in the sector of 472 088, Qonde said on Thursday.

“This is a clear indication that mining remains a strong pillar of our economy,” he added.

“South Africa possesses an extraordinary wealth of resources waiting to be unearthed. It is time to shift the focus, reinvigorate exploration efforts and rediscover the untapped treasure trove that lies within our borders.

“We appreciate that exploration is a costly and risky exercise. And that is why we've invested huge amounts of money to the Council for Geoscience to improve their work of de-risking exploration projects and supplying invaluable pre-competitive geological information to everybody who wants to venture into that space. By equipping explorers with comprehensive insight into South Africa's mineral-rich landscapes, we empower them to unlock untapped potential and uncover the hidden treasures that we possess.”

Qonde said the government’s focus was also on guaranteeing access to infrastructure such as energy and rail, with the government having removed the cap for embedded generation at mining sites to allow mining companies to generate their own electricity.

“We have observed an upsurge in companies investing in their own power-generating capacity since these amendments. And while loadshedding for the last two years has put a damper on our mining output and constrained our ability to beneficiate our minerals at home, we have observed a slight improvement in the energy availability at some of the Eskom plants, which gives us hope that we are efficiently addressing this particular challenge.”

In terms of rail safety and availability, Qonde said the government’s efforts in conjunction with those of Minerals Council South Africa, had seen an improvement in security along the coal link, with incidents of crime falling "dramatically".

“This enjoins us to continue working collaboratively to find solutions for rail and port infrastructure challenges, which presents opportunities and a conducive environment for massive investment in the mining sector in our country. Success in this regard will be seen in what we do as a collective. Moving forward, we're all putting very hard work into ensuring that all these obstacles are addressed and resolved quite speedily.”