Mining value chains and green growth in South Africa: A conflictual but intertwined relationship

The development of mining value chains is conflictual but deeply intertwined with the goal of sustainable development.  The response of mining value chains to the shift to a green economy cannot be business-as-usual and requires a proactive answer by business, Government, labour, non-governmental organisations and the research community in support of sustainable development. The transition to a green economy will not fundamentally challenge the central position of mining value chains in South Africa’s development path. The development of green industries and services will generate considerable mining-related opportunities, which South Africa is ideally placed to seize. The shift to a green economy will nevertheless structurally affect both the demand for mineral-based products, i.e. what to produce, and the means of providing them, i.e. how to produce. While many mining and manufacturing companies are already vigorously investing in the green economy, most prospects on both the supply and demand side remain underexploited or untapped.

This Working Paper builds on a research project on the impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa, carried out with the Global Green Growth Institute for the Economic Development Department and the Department of Trade and Industry of the Republic of South Africa.

Key policy recommendations:

a comprehensive strategic and integrated planning for the sustainable development of South Africa’s natural resources should be developed
institutional and legal confusion around environmental regulations should be addressed while environmental and social ‘licences to operate’ should be adequately enforced
the use of renewable energy and cogeneration and the improvement of resource efficiency, particularly in the area of energy and water, should be accelerated and further supported
the interplay between industrial development, trade and green economy in South Africa should be better understood, particularly in terms of potential risks and opportunities