South Africa is endowed with a wealth of minerals that are vital in supporting the ongoing global technology advancement and the shift towards renewable energy in developed regions and beyond. The country is the leading producer of platinum-group metals globally, accounting for around 70% of the world’s platinum supply and 40% of palladium, both of which are essential for catalytic converters, hydrogen fuel cells, electronics, and other applications.

Furthermore, South Africa contains 70% of the world’s chrome reserves, a critical component in stainless steel and chemical production, predominantly found in the Bushveld Igneous Complex. The nation is also one of the top producers of manganese globally, holding about 40% of the world’s total reserves.

Other important minerals include vanadium and nickel, which play crucial roles in battery technology and energy storage. Recently, lithium and coltan—sources of niobium and tantalum—have also been uncovered.

Critical minerals are fueling growth in a sector that has faced significant challenges in recent years. In August 2024, Stats SA reported a modest increase of 0.3% in South Africa’s mining output, largely driven by a 16% surge in manganese production and nearly a 25% rise in chromium output.

To further harness its mineral resources, South Africa, together with its African partners, must improve its beneficiation strategies.

The potential advantages are considerable. President Cyril Ramaphosa has conveyed to investors that by strategically adopting value-added projects and enhancing capacity, the continent could boost its GDP by 12% or more by 2050 and create millions of jobs.

Africa has vast deposits of the world’s crucial minerals for the energy transition: 55% of cobalt, 47.65% of manganese, 21.6% of natural graphite, 5.9% of copper, 5.6% of nickel, 1% of lithium, and 0.6% of iron ore, as per the UN Conference on Trade and Development (UNCTAD).

However, a united approach is necessary to gain control of the critical minerals value chain, where China currently has the upper hand. Significant efforts are underway to address high energy costs, infrastructure issues, and ensure stable policy environments. Major advancements in skills and technology are essential to close existing gaps, and positive strides are being made.

As South Africa emerges as a key automotive manufacturing hub in Africa, the growth of electric vehicles and a battery value chain could present new avenues to capitalize on the nation’s natural resources and competitive advantages.

Moving away from traditional practices

Despite the significant potential, a large portion of Africa’s minerals continues to be exported in their raw state, perpetuating outdated trade relationships with other regions.

The government recognizes that substantial progress must be supported by robust policies. South Africa is aware of this imperative and is crafting a strategic framework aimed at bolstering its critical minerals sector to positively influence development initiatives and diversify its energy supply.

The country’s abundant mineral resources underpin its Just Energy Transition Plan, which aims to reduce South Africa’s dependence on coal by expanding its flourishing renewable energy sector.

South Africa is making rapid strides in establishing a green hydrogen industry, guided by its Hydrogen Society Roadmap, which outlines specific objectives to meet by 2050. The ambition to produce and export green hydrogen is driven by the nation’s extensive reserves of platinum group metals.

The Green Hydrogen National Programme has attracted projects worth over $45 billion, with around 20% currently in the bankable feasibility phase. The initiative projects that global hydrogen demand will more than double by 2030 and increase six-fold by 2050.

The private sector is actively working alongside the government to develop this industry, as mining companies and others seek to decarbonize their operations and aim to establish Hydrogen Valley, a project centered on creating an integrated network of green hydrogen hubs across the country.