Minerals Council, which represents companies responsible for about 90% of South Africa’s mineral production by value, said it would study the strategy in detail before formally engaging government.
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The Minerals Council South Africa has raised alarm over key proposals contained in the Department of Trade, Industry and Competition’s (dtic) newly released Industrial Development Strategy 2026.
South Africa’s Industrial Development Strategy (IDS) 2026, which was published by the dtic on Monday, aims to shift the economy towards higher-value production; and reduce reliance on the export of primary mineral and agricultural products, which are prone to cyclical prices.
The strategy proposes a review of mining legislation on the allocation of mineral rights to enable the government to attach conditions that must facilitate beneficiation, and this must be in line with international mining, trade and investment laws. It argues that this shift is crucial because it will allow beneficiation objectives to be embedded in mining licensing decisions.
However, Minerals Council on Tuesday warned that measures aimed at promoting beneficiation could deter investment in exploration and mining at a time when South Africa is seeking to attract capital and stimulate economic growth.
Minerals Council, which represents companies responsible for about 90% of South Africa’s mineral production by value, said it would study the strategy in detail before formally engaging government.
However, it expressed immediate concern over provisions in the strategy’s implementation plan that propose the “preferential allocation of mining rights and licences, with conditionalities for beneficiation” and the introduction of an export tax and quota system for the chrome industry as part of efforts to increase local value addition and industrialisation.
Minerals Council CEO Mzila Mthenjane described the proposals as another source of policy uncertainty for an industry already grappling with regulatory challenges and weak investor confidence.
“It is an unfortunate policy intention from the Department of Trade, Industry and Competition, which, while not yet a law, adds to the incessant policy uncertainty that is constraining investment and growth of the mining industry and the economy,” Mthenjane said.
According to the Council, making beneficiation a condition for obtaining mining rights risks undermining South Africa’s attractiveness as a destination for exploration and mining investment.
“The proposal regarding the issuance of mining rights with conditions that must facilitate beneficiation could potentially damage future investments in exploration and mining,” Mthenjane warned.
The dispute reflects a long-running debate over how South Africa can maximise value from its vast mineral resources. It also comes as the mining industry is also engaged in discussions with the Department of Mineral and Petroleum Resources over the proposed Mineral Resources Development Bill.
The Council said those engagements are aimed at ensuring South Africa’s mining laws support a globally competitive exploration and mining environment capable of attracting investment, creating jobs and driving economic growth.
While government argues that increased local processing and manufacturing are essential to industrialisation and job creation, the mining industry maintains that mining and beneficiation are separate economic activities that require different investment incentives and business models.
“Mining and beneficiation are separate and distinct economic sectors in the mineral value chain. Beneficiation cannot, and must not, be imposed on mining because beneficiation forms part of manufacturing and overall industrialisation,” said Mthenjane.
He argued that government should focus on creating incentives that attract investment into downstream industries rather than compelling mining companies to undertake beneficiation activities.
“As such, specific measures must be introduced to incentivise and attract investments to stimulate industrialisation and the diversification of our economy,” he said.
One of the most contentious proposals relates to chrome ore exports. The Industrial Development Strategy proposes an export tax and quota system for chrome, alongside measures aimed at lowering beneficiation costs and attracting investment into chrome processing facilities.
However, the Minerals Council rejected the notion that exports are responsible for the decline of South Africa’s ferrochrome industry.
The Council argued that the real challenge facing local smelters is the sharp escalation in electricity costs, which have rendered many operations uneconomical.
It said electricity tariff increases of more than 900% since 2008 have made South Africa’s ferroalloys industry globally uncompetitive and shut unprofitable smelters.
The industry body added that restricting chrome exports would not solve the sector’s underlying competitiveness problems and could instead reduce mining revenues and discourage future investment.
The Minerals Council pointed to recent agreements that reduced electricity prices for Glencore Ferroalloys and Samancor, enabling the restart of smelting operations, as evidence that competitive power tariffs are the key to revitalising beneficiation and industrial activity.
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