Businesses in South Africa are pulling investments as the government fumbles.
Investors have lost faith in South Africa’s government and have halted investment despite a wealth of opportunities, the head of the country’s biggest employer in the crucial mining industry said.
Mining accounted for 4% of the gross domestic product in 2022, employed about 476,000 people and generated R878 billion in exports, according to the Minerals Council South Africa, a lobby group representing most mining groups operating in the country. Mining companies, among the nation’s biggest electricity users, are scaling down some activities. The outages probably cut South Africa’s output for platinum-group metals by 10% in 2022, and this year, production could fall by a fifth, Froneman said.
Since its formation, Froneman has diversified the company by buying platinum, nickel and lithium operations in Zimbabwe, Europe, and the US mining companies are now at risk of closing some unprofitable shafts in South Africa, which would lead to job cuts, he warned. The Minerals Council in December demanded that Transnet management be removed, according to a report by News24, which cited a letter sent by the group to the company’s chairman. Transnet and the Minerals Council have declined to comment on the letter.
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