Valued assets

SA is well placed to be a supplier of critical minerals but environmental implications need to be closely managed

Valued assets

The average electric vehicle [EV] uses 83 kg of copper versus around 23 kg for the usual petrol or diesel-driven car engine. That’s according to a research paper in 2024 from the International Copper Association. By 2027, the organisation estimates there will be about 27 million EVs on the planet’s roads, up from 3 million in 2017. ‘This will raise copper demand in EVs from 185 000 tons in 2017 to 1.74 million tons in 2027,’ it says.

Copper is just one of the world’s critical minerals – along with lithium, manganese, cobalt and others – which will be of utmost importance in applications to fight against climate change. SA is fortunate to be well positioned globally as a supplier of some of these minerals.

‘South Africa boasts reserves of critical minerals, including platinum group metals, manganese, vanadium, nickel, copper, lithium, graphite, rhodium and rare earth elements,’ says Loshni Naidoo, Chief Sustainability Officer at the JSE. ‘The abundance of a variety of minerals required for technologies, such as electric vehicles and renewable energy systems, allows us to be favourably positioned in the global supply chain.

‘Countries are looking to diversify where they source these minerals as a risk-mitigation strategy, which places SA in a strong position. This could therefore make local mining companies more attractive and globally competitive. Of course, the country has extensive mining experience and expertise, which can be transferred to the extraction of critical minerals or metals. This includes a workforce that is highly skilled and has extensive processing capabilities.’

The spin-offs will reach beyond the mining sector, too. ‘We could see an expansion in mining-related support services. For instance, the growth of SMMEs, or introduction of new players, that provide equipment or other support services to companies in the mining sector. There will be growth in the renewable energy sector, which will reduce a reliance on fossil fuel and diversify SA’s energy mix.

‘In the waste industry, there could be an increase in recycling levels, which will contribute to job creation as well as to GDP. In the auto industry, where the country has extensive local experience in automotive production, we could potentially extend this expertise and existing infrastructure to electric vehicle production, thereby also boosting the economy. And, of course, there’s the spin-off via increased beneficiation and local processing, which could drive innovation or new practices, all contributing to economic growth and development. All of which has positive knock-on effects such as increasing employment, attracting foreign investment and improving livelihoods.’

Naidoo emphasises that the benefits of critical minerals application must, however, be balanced with the environmental costs of mining, as well as the increased challenges mining companies face in the light of highlighted ESG regulations and policies that promote good sustainable and ethical practices.

‘Balancing the cost and benefits involves several strategies and considerations, as mining of minerals like lithium and cobalt does have significant environmental impacts. Companies must have the ability to manage the environmental degradation and social costs, as well as the greater scrutiny of supply chains, especially the mechanisms and processes for sourcing these raw materials for “green” technologies. Mining companies should leverage their vast mining experience and innovate to introduce more efficient mining processes that mitigate environmental degradation and prioritise environmental restoration and rehabilitation. The subsequent benefits will also have positive social and human health implications,’ she says.

‘Local community involvement will be key to ongoing operations. Involving local communities in decision-making processes to ensure mining activities do not disproportionately harm them, and that they benefit from the economic opportunities that are created – is crucial.’

By Patrick Farrell
Image: iStock