SA Mine 2024

It’s been a challenging year for South Africa’s mining industry. Commodity prices, with the exception of gold have been under pressure, causing a significant drop in both revenue and profits. Mining industry headlines have been dominated by retrenchments, falling stock prices, restructuring for efficiency and efforts to become more fit for purpose. Mining companies have had to look beyond mining to survive the downturn, position themselves for the future and evolve with the changing regulatory and social landscape.

The commodity price downturn has again emphasised the importance of strong financial positions. A strong balance sheet provides for opportunistic transactions and options in sourcing capital, which is critical for a cyclical industry. There are numerous capital sourcing options, but one of the trends we have noted is that mining companies are increasingly using green and sustainability loans to support operations which align with their own and global sustainability goals.

In 2024, the South African mining sector saw a significant increase in deal values. The increase in deal values aligns with global trends, driven by the quest for critical minerals essential for the energy transition. In South Africa, the deal-critical mineral of focus was copper, whose price performed exceptionally in the current year. The second reason has consolidation and operational synergies and lastly diversification and strategic realignment.

Mining is key to the economy. Mining companies play a crucial role in the communities they operate in, not only as employers or as engines for the economies around them, but through the other services—such as clean water—that they provide to their communities. It is therefore crucial to start thinking and planning for a mining sector that is sustainable when operations close and that, where possible, uses available technologies to improve safety, productivity and efficiencies to extend the life of its mines.