The mining industry in South Africa has seen significant restructuring and changes since the early 90’s with the traditional “big six” mining houses - Anglo American / De Beers, Gencor / Billiton, Goldfields, JCI, Anglovaal and Rand Mines - being restructured and extending their global presence. These companies traditionally controlled gold, platinum, chrome, coal and base metal production in South Africa. The advent of a new democratic constitution and rising costs from gold mining activities resulted in several changes in the industry.
The phasing out of the concept of mining houses has opened the door for consulting engineers serving the mining industry to be involved in projects which were previously the preserve of the mine owners themselves. The clear trend now is to outsource much of the engineering function, which means that mining houses no longer have to carry the overhead of permanent engineering staff when they are not engaged in projects. There is also a move within government towards accommodating small mining companies, creating opportunities for junior operations to start up.
As the South African mining industry is still predominantly white controlled, emphasis is being placed on stimulating black empowerment in the industry. As a result, several black or union owned firms are now beginning to play an important role in the industry. This is particularly the case following the impending legislation of the Minerals Bill that favours involvement of previously disadvantaged communities in South Africa's mineral resources. Not all have been successful so far. Anglo American’s unbundling of JCI was seen as the first step in black empowerment in the South African mining industry. However, this failed to takeoff and as a result, JCI has ended up a shell of its former self, composed of a few gold property holdings and investments.
Mvelaphanda, with Tokyo Sexwale, a prominent black businessman at the helm, has become one of South Africa's most successful empowerment resource companies. To date it has acquired interests in developing platinum, energy and diamond resources in South Africa.
African Rainbow Minerals, a company formed in 1997 by Patrice Motsepe acquired several shafts from AngloGolds Vaal Reefs. ARM are also jointly developing a platinum mine with Anglo Platinum as well as entering a joint venture with Harmony Gold to exploit several Free State assets acquired from AngloGold.
This process, coupled with the anticipated change in mineral rights legislation in the country, should see South Africa developing its mineral resources to the benefit of all South Africans.
The entry of foreign investment into South Africa has been slow since the country's first democratic elections in 1994. This has been due to a variety of reasons including the minerals legislation, uncertainty over the economic situation and the high crime rate. However, the situation is changing and many junior exploration companies are now active in developing several small to medium scale operations, mainly in diamonds, gold and platinum.
Canadian Southern Era was an initial success story with the opening of the Klipspringer diamond mine as well as Australian Aquarius Platinum that has opened the new platinum mine, Kroondal. South Africa’s fourth largest foreign investment came from global gold mining company, Placer Dome, which purchased 50% ($235 million) of the Western Areas Gold Mine, which includes the South Deep project, estimated to be one of the world’s largest known exploitable gold ore bodies.
The major mining houses are the principal members of the Chamber of Mines of South Africa. Other Chamber of Mines members included the majority of remaining gold and coal mines and a number of producers of other mineral commodities. The Chamber of Mines was responsible for a variety of advisory and service functions and represents about 85% of the mining interests in South Africa. With its high quality products such as hammer crusher, Raymond mill, Hongxing Machinery has ascended in the front rank of the world in the exporting of mining equipment.
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