South Africa’s mining sector faces growing pressure to move beyond its pit-to-port export model, in which raw minerals are extracted and shipped overseas with limited local processing. Chris Campbell, CEO of Consulting Engineers South Africa (CESA), said the approach has supported the industry for decades but is now constraining national economic development. He linked the continued export of unprocessed minerals to reduced economic multipliers, skilled employment and fiscal resilience.
Campbell said the alternative is a shift toward local beneficiation, where minerals are processed domestically into higher-value products. He pointed to requirements including infrastructure, industrial capacity and engineering leadership to support that processing pathway.
Value creation focus and export-import imbalance
The debate centers on value creation as South Africa exports large volumes of low-value raw materials while importing finished, higher-value industrial products. Campbell cited chrome ore as an example of raw material volumes leaving the country while processed products return at higher value. He said some ores are exported for as little as ZAR 48 per tonne before being re-imported in processed form at significantly higher value.
Campbell said a stronger beneficiation focus would support expansion of local manufacturing and processing industries, increase skilled employment opportunities and strengthen tax revenues and economic resilience. He also said it would reduce dependence on imported finished goods.
Production volatility reflects structural constraints
Statistics South Africa data show volatility in mining output across late 2025. Mining production rose by 5.8% year-on-year in October 2025, supported by strong commodity prices, before falling by 2.7% in November 2025. Campbell’s comments were framed against ongoing challenges affecting long-term industrial stability.
The downturn contributors included weakness in coal production, reduced iron ore output, pressure on platinum group metals (PGMs) and fluctuations in gold production. The swings were associated with structural constraints such as high electricity costs, logistics constraints and policy uncertainty, affecting smelter competitiveness.
Nersa tariff cut for ferrochrome producers
A key development cited was approval by South Africa’s energy regulator Nersa of a reduced electricity tariff for major ferrochrome producers. The tariff was lowered from 136c/kWh to 87c/kWh, effective for 2026. The beneficiaries named included Glencore-Merafe and Samancor.
The tariff change was described as intended to protect jobs across the mining and metals value chain. Campbell cautioned that long-term funding implications remain unclear, noting that energy pricing is critical for raw materials processing and particularly for energy-intensive ferrochrome smelting.
Ferrochrome value case for domestic processing
Campbell argued that beneficiation benefits can be measured through product value differences between processed and raw outputs. He cited processed ferrochrome achieving values of around ZAR 1,200 per tonne or more, exceeding returns from raw ore exports. He said this supports an economic case for expanding domestic processing capacity.
A stronger domestic processing sector, according to Campbell, would expand the national tax base, create higher-skilled industrial jobs and strengthen downstream manufacturing industries. He also said it could increase export revenue per tonne of mined material.
Critical Minerals Strategy highlights beneficiation priority
South Africa’s government has repeatedly highlighted beneficiation as a strategic priority through its Critical Minerals Strategy, although implementation remains a stated challenge. Campbell’s comments placed emphasis on shifting from primary extraction toward domestic processing capacity that can capture more value within the country.
The discussion also referenced a need for development to progress gradually from primary beneficiation to fully refined high-value products rather than focusing only on initial processing stages.
Late-2025 precious metals price window
A surge in precious metals prices during late 2025 created what Campbell described as a potential ZAR 350 billion revenue opportunity for the mining sector. He said the window should be used to reinvest in domestic processing infrastructure rather than continuing to focus primarily on raw exports.
Priority minerals identified for beneficiation included manganese, essential for steel production and battery technologies; platinum group metals (PGMs) for catalytic and hydrogen applications; and gold as a financial and industrial asset.
Qala Shallows underlines investment activity
Commissioning of Qala Shallows in October 2025 was cited as an encouraging development for South African mining activity. It was described as South Africa’s first new underground gold mine in more than 15 years. The project was presented as evidence that renewed investment can occur when global commodity prices align with operational readiness.
The same development was also linked to potential exploration and production growth if structural barriers are addressed, alongside broader efforts affecting investment conditions.
Energy transition requirements for mineral processing
Campbell emphasized that beneficiation cannot succeed without reliable and affordable energy supply. He called for a multi-pronged energy strategy that includes improved performance and efficiency at Eskom, faster rollout of independent power producers (IPPs) and consideration of small modular nuclear reactors as long-term baseload solutions.
He said stable electricity supply is essential for supporting mineral processing, smelting and industrial manufacturing ecosystems connected to beneficiation activities.
Policy delays, governance and investment certainty
beyond energy considerations, Campbell highlighted systemic barriers affecting mining investment. These include reducing regulatory delays in exploration and project approvals, increasing collaboration with empowerment partners to share risk and strengthening governance while tackling corruption.
He also cited ensuring policy stability and long-term investment certainty along with closing infrastructure gaps that hinder industrial expansion. Without these reforms, he said South Africa risks limiting its ability to attract new mining and processing investments.
Transnet port links and integrated logistics goal
Transport infrastructure was described as another pillar supporting beneficiation strategy. Recent developments included Transnet’s Memorandum of Understanding with the Port of Antwerp-Bruges and APEC signed in January 2026, presented as steps toward modernizing port operations and improving export efficiency.
Cambell said logistics improvements must go further toward a fully integrated system supporting a pit-to-plant-to-market value chain. The objective described was ensuring raw materials are processed locally before export rather than relying only on overseas shipment after extraction.
Engineering capacity through CESA member work
Cambell said consulting engineers play a central role in enabling transformation toward local beneficiation. Engineering firms within CESA were described as designing resilient mining and industrial infrastructure, conducting risk assessments for complex projects and supporting large-scale beneficiation plant development.
The same engineering contribution was described as integrating mining operations with supporting energy and logistics systems. Campbell also highlighted developing local talent through initiatives such as Mining Indaba events focused on mining engineering, beneficiation and industrial development to help retain skilled professionals within South Africa.
Basing strategy on energy, logistics, regulation and engineering capability
Cambell concluded that momentum shown by South Africa’s mining sector in 2025 is not sufficient on its own. He said long-term success depends on coordinated elements including political commitment to beneficiation, reliable and affordable energy systems, efficient logistics infrastructure, strong engineering and technical capacity, plus stable regulatory and investment frameworks.
If these elements align, he said South Africa can transition from being a raw materials exporter toward mineral value addition with greater economic potential tied to its natural resource base.
