Who Owns Whom

The mining industry has long been a cornerstone of South Africa’s economy, with associated services being essential and critical in the value chain. The WOW report on services incidental to mining of minerals highlights the extensive list of services for the industry – from site preparation to actual mining, provision of maintenance of equipment, logistics and site rehabilitation.

Globally and in South Africa, this sector is driven by innovation. The industry has always integrated the use of technology to improve efficiency in the mining process and reduce risks, particularly underground, while balancing the need to retain jobs. It is evident from the report that demand for the industry’s services is expected to grow due to the large volumes of minerals needed for the global energy transition.

With Africa being regarded as a strategic long-term growth market for mining, South Africa’s standing and its expertise position the country well to take advantage of available opportunities and support this optimism.

Innovation in the mining services sector

Technological advancements and innovation in South Africa include Master Sinkers’ latest development. In a joint venture with the Industrial Development Corporation (IDC), it is developing a shaft boring machine for hard rock applications – the first in the world. This will revolutionise hard rock shaft sinking by removing the need for blasting, and for people entering the shaft to excavate blasted material.

In February 2024, it launched a R36m mechanised mining mock-up facility that provides equipment operator trainees with a realistic learning experience without them having to put theoretical learning into practice in a real underground mine. It is 3.5m high and covers 1,125m2, and real mining machinery is used.

Challenges in the mining sector and their effect on the services industry

The mining services industry in South Africa is intricately intertwined with the mining industry. For it to thrive, a total revamp of the Department of Minerals and Energy (DME) is required. The growing backlog of exploration and mining permits is affecting activities and opportunities in the South African mining sector, despite the wealth of mineral deposits in the country.

With the country’s numerous minerals and well-established service providers with expertise in mining services and support, the exploration application process needs to be revamped to unlock opportunities for the whole mining ecosystem.

The failure by the DME to process any of the 2,525 mining permits in 20223/24 as stated in Miningmx, and the 2021 backlog of 5,396 only being reduced to 4,486 two and a half year, later does not bode well for a country whose economy has stagnated and where unemployment is dangerously high.

Source: The Fraser Institute

To leverage the wealth of minerals, the country needs to address the negative perception associated with safety and poor government services. The graph indicates where Africa features in terms of attractiveness for investment opportunities in the mining services industry.

Globally, the mining services industry had an estimated revenue of US$284.0bn in 2023, which is expected to grow by 7.3% to US$304.8bn in 2024, and to rise to US$407.5bn in 2028, largely in response to increased demand for minerals needed for the world’s energy transition.

SMEs have the opportunity to provide goods and services to mining services companies. Zizwe Opencast Mining identifies SMEs from local communities where its customers’ mines are and uses them as preferential suppliers. It supports SMEs by providing training in areas such as budgeting and cash flow management and offering interest-free loans and the use of its equipment.

With a well-established sector with expertise, the country has an opportunity to develop and export solutions for sustainable mining practices, including water management, renewable energy integration, and emission reduction.

South Africa’s mining services sector stands poised to leverage its expertise, innovation, and strategic positioning to capitalise on global opportunities. To realise this, the government would need to address its regulatory challenges and improve government services and fix the logistical disruptions at Transnet. This will help unlock the full potential of this critical industry, driving economic growth, job creation, and a significant contribution to the global energy transition.

Contact us to access WOW's quality research on African industries and business

Contact Us

Most Popular Articles

Administrative and support activitiesSouth Africa

Causes of Unemployment: Labour and recruitment in South Africa

Read more

ManufacturingSouth Africa

The Flour and Grain milling industry – from field to table

Read more

South AfricaTransportation and storage

The Status of Road Infrastructure in South Africa

Read more

Related Articles

BlogCountries Mining and quarryingSouth Africa

Illegal mining – an explosive nuisance

Contents [hide] Illegal mining has grown exponentially in recent years in South Africa, as detailed in WOW’s report on the Manufacture of Explosives and pyrotechnics in South Africa . The...

BlogCountries Mining and quarryingSouth Africa

Can the South African mining industry continue to grow following Covid?

Contents [hide] The mining industry in South Africa is one of the biggest contributors to the country’s fiscus, and one would imagine it to be on government’s priority list for...

BlogCountries Mining and quarryingSouth Africa

Mining Companies in Africa continue to grow as climate change shifts

Contents [hide] Africa has plenty of minerals and mineral elements such as bauxite, coal, diamonds, gold, platinum-group metals (PGMs), iron ore, copper, lead, lithium, manganese, nickel, cobalt, phosphate rock, semi-precious...