A new report from the Minerals Council South Africa highlights severe challenges facing the country's junior mining sector, noting that illegal operations are easier to run than legal ones. The document points to a lack of exploration investment, criminal threats, and regulatory hurdles as major barriers. It warns that without support, the sector's potential for jobs and growth remains untapped.
The Minerals Council South Africa released a report this week examining the constraints on junior and emerging miners. These companies are vital for exploration and providing opportunities to historically disadvantaged groups, the report states. It estimates that a thriving sector could generate 50,000 direct jobs and 350,000 indirect jobs over the next decade.
Junior miners struggle against illegal operations, known locally as zama zamas. 'It is easier to operate an illegal small-scale operation than to comply with all the legal requirements, and there are few or no consequences for illegal miners,' the report notes. In 2024, 77% of 2,065 mining licences and permits went to junior, small-scale, or micro miners, yet they produced just 11% of revenue.
South Africa's Johannesburg Stock Exchange lists only 12 junior mining companies with market capitalisations under R1 billion, compared to 883 on the Toronto Stock Exchange and 720 in Australia. Exploration spending has plummeted from over 8% of global totals in 2001 to less than 1% in 2025. The absence of a functional mining cadastre system exacerbates issues, unlike in neighbouring countries such as Botswana and Namibia.
Organised crime syndicates are hijacking mines with heavy equipment, prompting companies to hire private security. 'Threats are no longer small and random; they are highly organised,' the report says. Foreign investors cite crime and overlapping licences as deterrents.
Recommendations include reactivating over 30 idle mines, adopting Canada's flow-through share incentives for JSE listings, and finally launching the cadastre.