South Africa: Sinkhole Opens Up Beneath South Africa's Mining Industry


In the same week that Finance Minister Tito Mboweni delivered his Budget speech, the Canadian-based Fraser Institute published its annual survey and Investment Attractiveness Index of mining jurisdictions, which focuses on exploration investment.

First published in the Daily Maverick 168 weekly newspaper.

It shows that South Africa has fallen to 60th out of 77 in 2020 from 40th out of 76 in 2019. Among the 13 African countries in the index, South Africa is now a dismal 11th, overtaken by the DRC - the horror, the horror! - with only Zimbabwe and Tanzania ranked lower.

One of the striking things about this steep decline is that it comes against the backdrop of record earnings for producers of PGMs (platinum group metals). And the biggest source of PGMs is South Africa.

Gold producers have also churned out huge profits. This is because, for a range of reasons, prices have been on a tear. Gold has been lifted by its safe-haven appeal during a time of upheaval, while there are shortages of key PGMs, notably palladium and rhodium, coveted for their role as petrol catalysts.

One of the upshots of this state of affairs is that mining companies actually paid more in...

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