06 Feb Transforming Mining, Smart partnerships key to sustaining growth
Economic transformation within the mining sector remains central to South Africa’s longterm growth and industrial development. Mining has historically underpinned the country’s economy for more than a
century and continues to play a material role in national output, national revenue exports and employment. In 2024, the mining sector contributed 6.0% of South Africa’s nominal GDP, equating to R442.7 billion, while accounting for 45% of total merchandise exports and supporting over 470,000 direct jobs.
While mining’s share of GDP has declined from historical peaks, its strategic importance has evolved rather than diminished. The sector is increasingly shaped by advances in digitalisation, artificial intelligence and industrial automation, which are transforming productivity, safety and environmental performance. At the same time, mining has become more deeply embedded in the broader economy through supplychain linkages with manufacturing, energy, logistics and technologydriven industries.
This evolution reflects a fundamental reality: modern economies are inseparable from mining. Everyday technologies—from mobile devices and data centres to electric vehicles and renewable energy infrastructure— depend on a steady supply of critical minerals. As a result, global demand for minerals such as manganese, copper, platinum group metals, cobalt, nickel and graphite has accelerated, driven in part by the global energy transition, digitalisation and growth in advanced manufacturing.
These shifts present substantial opportunities for growth and value creation. However, they also highlight the urgency of ensuring that the benefits of mining are more broadly shared. South Africa remains one of the most unequal societies globally, and despite progress, transformation in the mining sector remains uneven. In 2004, when the first Mining Charter was introduced, black ownership in the industry stood at approximately 2%. By 2024, this figure had increased to about 39%, reflecting three decades of policydriven transformation and empowerment initiatives.
While this progress is significant, ownership levels alone do not fully capture the depth or sustainability of transformation. Participation across the value chain, access to capital, and the emergence of new blackowned entrants—particularly in upstream exploration—remain critical challenges. Without continued intervention, the sector risks entrenching historical patterns of exclusion rather than advancing inclusive growth.
Encouragingly, progress since the democratic transition demonstrates what is possible through coordinated action between the state, development finance institutions and the private sector. The Industrial Development Corporation (IDC), which celebrated 85 years of operation in 2024, has played a central role in funding South Africa’s industrial and transformation agenda, including within mining. Through its financing and risksharing mechanisms, the IDC has supported the growth of blackowned and empowered mining companies across commodities and regions.
Funding Transformation
A landmark example remains the 2006 unbundling of Kumba Resources, which led to the formation of Exxaro Resources through a major empowerment transaction supported by the IDC. Exxaro subsequently became one of the first blackowned mining companies to list on the JSE. Since then, several empowered firms—including Seriti Resources, Incwala Resources, Northam Platinum and Royal Bafokeng Platinum—have benefited from similar developmentfocused funding models.
However, transformation cannot rely solely on established players. Apersistent structural barrier has been the high cost and risk associated with mineral exploration, which has historically excluded emerging entrepreneurs and junior miners. South Africa’s share of global mineral exploration expenditure has declined to less than 1%, down from around 5% two decades ago, underscoring the severity of the exploration funding gap.
To address this challenge, the IDC, in partnership with the Department of Mineral Resources and Energy and the Council for Geoscience, launched the R400 million Junior Mining Exploration Fund (JMEF) in 2024. The fund is designed to expand access to earlystage exploration capital for more than 50% blackowned junior mining companies, through nonrepayable grants that are convertible to equity upon the discovery of a viable ore body.
The response has been strong. The first funding window, which closed in mid2025, attracted over 110 applications, with eight projects approved, accounting for R160 million, or 41.2% of the total fund value. These projects span five provinces and target minerals including copper, nickel, lithium, graphite and rare earth elements, reflecting both regional diversity and alignment with futurefacing commodities.
For many beneficiaries, the JMEF represents a first meaningful entry point into the mining value chain—unlocking opportunities that were previously inaccessible due to capital constraints. Early indications suggest that several projects have progressed to advanced geological work, including geophysical surveys and drilltarget identification, signalling tangible momentum. The early success of the JMEF highlights the catalytic role of wellstructured publicsector partnerships in advancing inclusive growth. As South Africa positions itself within global mineral supply chains critical to the energy transition, sustained collaboration between government, development finance institutions and the private sector will be essential. Replicating and scaling such models will be key to building a mining sector that is not only globally competitive, but also more equitable, resilient and sustainable.
Yose is the Divisional Executive (Acting): Mining, Metals, Infrastructure and energy at the IDC
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