The Department of Mineral and Petroleum Resources has been allocated R2.86 billion for the 2025/26 financial year. Of this amount, R1.16 billion, representing 40.55% of the total budget, will be transferred to public entities, municipalities, and other implementing institutions to enable them to fulfil their constitutional mandates. 

This was announced by Minister Gwede Mantashe during the presentation of Budget Vote 34 in Parliament last week, where he outlined the department’s priorities and strategic objectives for the year ahead.

“Although constrained due to prevailing economic hardships, this budget is geared towards enabling the department to efficiently regulate the mining and petroleum sectors for transformation, inclusive growth, development and ensure that all South Africans derive sustainable benefit from the country’s natural wealth.”, Mantashe said.

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The Minister added that the budget is being tabled amidst a challenging landscape marked by escalating trade tensions and rapidly evolving geopolitical relationships. The political and economic consequences of these tensions and conflicts, Mantashe said, continue to have a negative impact on the world economy, with developing countries, such as South Africa, being the hardest hit.

Mantashe said “Currently, apart from gold, prices of minerals that dominate South Africa’s mining export basket remain depressed. Whereas minerals such as coal, platinum group metals (PGMs), manganese, and chrome have been excluded from the tariffs imposed by the government of the United States of America, the inclusion of diamonds and iron ore in the 30% reciprocal tariffs on imports from South Africa threatens our export earnings and has the potential to damage the global economic growth.”

Despite the challenging global environment, mining gross value added rebounded by 0.3% in 2024, from a 0.5% decline in 2023. Effectively, in rand terms, 2024 saw the mining sector contributing R451 billion to the country’s Gross Domestic Product (GDP), thus sustaining the 6% total contribution to the GDP. In the same period, the mining industry’s export earnings totalled R674 billion, comprised of R586.4 billion from primary minerals and R87.5 billion from processed minerals, representing a decrease of 0.6% from R678 billion in 2023. In addition, the mining sector employed 484 837 mineworkers in 2024, marking a significant decrease of 0.9% from the 489 022 of the previous year. Most of the job losses were in the PGM sector in which profitability has been weighed down by low prices.

Developments since the previous Budget

Since the last budget was tabled, Mantashe reported the following key developments:

• The Department finalised the draft Mineral Resources Development Bill (MPRDB) and published it for public comment. The Bill is currently undergoing comprehensive consultations with stakeholders before processing it to Parliament.

• Mantashe said his department reviewed the Petroleum Products Act (PPA) to address challenges raised by stakeholders such as non-compliance tools, transformation of the industry, clarifications of offences, as well as criminalisation of certain acts.
Having gazetted the draft Petroleum Products Bill in October 2024, the department has consolidated the stakeholder inputs. Mantashe added that his department intends to submit the Bill to Cabinet for approval ahead of tabling in Parliament before the end of the financial year.

• The signing into law of the Upstream Petroleum Resources Development Act (UPRDA) by the President in October last year. The department is
finalising the regulations with an intention to complete the process by the end of September 2025.

• The Mine Health and Safety Amendment Bill (MHSA Bill) has been tabled to parliament.

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Sustaining South Africa’s mining industry
Mantashe emphasised that the sustainability of South Africa’s mining industry depends on a strong pipeline of new mineral discoveries. He said the Junior Mining Exploration Fund is a targeted intervention in this regard. Established through a R200 million allocation from the National Treasury, matched by the Industrial Development Corporation (IDC), this fund is poised to unlock new mineral discoveries and drive transformation. Mantashe said the fund will enable the discovery of new minerals that are essential for a range of industries such as advanced manufacturing, technology and infrastructure development. Mintek has completed the study on the state of mining in South Africa and the development of the country’s Critical Minerals and Metals Strategy for implementation. Having produced individual commodity reports on 21 minerals, the critical minerals strategy shows that minerals such as platinum, manganese, iron ore, coal, and chrome ore are poised to play a critical role in the South African mining industry and the economy for the foreseeable future.

Mantashe said: “In contrast to the sceptic view that the South African mining industry is a sunset industry, with the comprehensive and up-to-date insights into key developments within global commodity markets, mineral production trends in South Africa, and the mining sector’s contribution to the economy, we are now more convinced than ever that the South African mining industry is a sunrise industry. This mining frontier is filled with
exciting opportunities for investors and the economy.”

“Despite the mineral endowment that our nation is blessed with, the South African mining industry continues to prioritise the pit-to-port approach to mining, in contrast to local beneficiation. In so doing, the industry continues to export the benefits and jobs that ought to accrue to the nation. Our engagements with the manganese and chrome producers are beginning to take shape with concrete proposals being considered to
promote the creation of value-added products close to the point of production including ensuring consistent, reliable, efficient, and affordable electricity supply; implementation of an export tax; and the introduction of quotas to restrict the amount of raw minerals that can be exported from our country.”

Recently, the department announced that plans to deliver a new mining licensing system were on track and would begin in the Western Cape in June. Mantashe told Parliament the roll out is taking longer than initially expected, and would need to be rescheduled by a further three months.

“The integrity of a transparent mining licensing system is a function of the underlying data. It is important that as we migrate data from the old system to the new system, we ensure that the new system reflects the reality on the ground in so far as ownership of rights is concerned. This is a delicate process that requires precision and quality assurance, and it is taking longer than we had anticipated.”, he said.
“I can, however, assure you, honourable members and all social partners in the industry, that we remain fully committed to modernising and improving the efficiency of our mineral resource management. To accelerate progress, we have allocated additional resources and human capital to key project areas including, data migration, testing, training, and deployment. Additionally, we have enlisted the services of the Council for Scientific and Industrial Research (CSIR).”

WATCH MANTASHE’S FULL ADDRESS HERE: