The South African Mining Council recommends drawing on Finland’s mineral processing model to promote value addition in the mining sector and upgrade industrial structures.

　　At the third day of the 2026 Africa Mining Investment Conference held in Cape Town this Wednesday, Bongani Motsa, acting chief economist at the South African Minerals Council, stated that Finland is one of the countries South Africa could particularly draw upon for inspiration in the field of mineral beneficiation—also known as mineral value-added processing.

　　Motsa joined Shamini Harrington, Senior Executive Officer for Environment, Health, and Heritage at the South African Minerals Council, and Tebello Chabana, Senior Executive Officer for Public Affairs and Transformation, in a panel discussion. He pointed out that Finland has implemented a targeted mineral value-adding strategy centered around its National Mineral Strategy.

　　“Finland has realized that simply exporting raw minerals cannot maximize economic and technological benefits, so it has made substantial investments in downstream processing, R&D, and innovation,” said Motsa. “Finland’s model emphasizes integrating mineral development with the EU’s critical raw materials agenda while simultaneously building domestic industrial capacity. This means strengthening close collaboration among mining companies, technology developers, and universities—ensuring that minerals are not only extracted but also transformed into high-value products used in batteries, clean energy systems, and high-tech manufacturing,” Motsa clarified.

　　According to foreign media reports, Finland’s mineral strategy also integrates principles of sustainable development, the circular economy, and environmental safeguards, making Finland a responsible supplier in the global mineral supply chain.

　　Finland’s list of priority minerals reflects both its domestic geological endowments and global demand trends. It includes nickel, cobalt, lithium, graphite, and rare earth elements, while also covering its traditionally strong minerals—copper, zinc, and platinum-group metals. The selection of these minerals is driven by their critical roles in battery technology, renewable energy systems, and the digital industry.

　　For example, leveraging its nickel and cobalt resources, Finland has become a European hub for the production of battery precursors. At the same time, it is making substantial investments in lithium refining and developing advanced systems for recycling critical materials.

　　By focusing on value-added mineral processing, Finland has successfully transformed itself from a mere supplier of raw materials into a strategic player in the global clean energy and technology supply chain.

　　To promote the integration of key mineral resources with industrialization, Finland has adopted a multi-faceted approach that combines policy, institutional frameworks, and financial measures.

　　The core policy instrument is the National Mineral Strategy, coordinated and developed by the Ministry of Economic Affairs and Employment. This strategy defines objectives for enhancing the value of mineral resources and is committed to aligning with the EU’s agenda for clean energy and digital transformation.

　　Motsa stated that South Africa’s strategic approach to critical minerals and metals is a good starting point.

　　At the institutional level, the Finnish government is making substantial investments in the research and development of an innovation ecosystem—particularly through the Geological Survey of Finland and collaborations with universities—to ensure that mineral extraction is closely integrated with advanced processing and technological development.

　　“As South Africa, we already possess the institutional capacity; the question is, how much targeted resources we will allocate to realize the vision of our critical minerals and metals strategy,” he said. “In fact, this brings to mind an important aspect that needs to be highlighted. Aside from a few key inputs—including electricity subsidies ranging from 23.8 billion to 44.2 billion South African rand and 400 million South African rand in exploration funding provided by the Industrial Development Corporation (IDC)—the strategy, overall, has not undergone a cost-benefit analysis,” Motsa pointed out.

　　On the financial front, Finland has adopted three key instruments—public-private partnership investment institutions, innovation funds, and EU-supported financing—to mitigate risks associated with large-scale capital projects in the minerals sector. The country has also integrated circular economy principles into its strategy, encouraging the recycling and secondary use of critical minerals to ensure a stable industrial supply.

　　These policies, systems, and financial measures, working in concert, have enabled Finland to break free from its reliance on raw mineral exports and become a key hub for battery materials, clean energy technologies, and inputs for high-end manufacturing in Europe.

　　Motsa highlighted a critical gap in South Africa: insufficient investment in research and development (R&D). “Typically, countries that achieve sustainable economic growth allocate an average of 3% to 5% of their gross domestic product (GDP) to R&D. In 2024, South Africa’s R&D expenditure stood at 56 billion South African rand, accounting for only 0.8% of GDP—far below the global benchmark for sustainable growth.”

　　“South Africa’s mineral wealth is beyond doubt. But underground riches do not automatically translate into societal prosperity,” Motsa emphasized. “By focusing on value addition in the mining sector—transforming platinum into hydrogen fuel cells, manganese into battery materials, iron ore into steel, coal into chemicals, and chromium into stainless steel—South Africa can achieve economic transformation. All of this is aimed at addressing the challenges facing the nation—and only then will our mineral value-addition truly carry meaning.”

　　“The choice before us is clear: either we continue to be a supplier of raw materials, or we become a global leader in the mineral-based industry. Adding value to minerals is not merely an economic strategy—it’s a national imperative,” he added.

　　One-stop licensing system

　　Speaking at a panel discussion hosted by Mining Weekly, Shamini Harrington stated that the mining sector remains a foundational pillar of South Africa’s economic system, driving industrialization, socio-economic growth, and job creation. She emphasized that to sustain this status quo, it is essential to establish a predictable, coordinated, and supportive policy environment within the framework of mining, environmental protection, and climate change.

　　Harrington added that although coherent policies are crucial for promoting responsible mining, decarbonization, investment, and enhancing global competitiveness, the mining industry is currently hampered by policy fragmentation, complex permitting procedures, and low administrative efficiency. This lack of coordination undermines market certainty and increases investment risks.

　　She believes that this challenge also presents a clear opportunity to establish an integrated, one-stop licensing system.

　　A coordinated permitting framework covering mining, environment, water resources, and land-use permits will significantly reduce fragmentation and uncertainty. By replacing the sectoral, linear approval process with a coordinated, parallel review system, this framework will enhance efficiency, minimize duplication of effort, and provide investors with greater certainty—while still upholding stringent environmental and social safeguards.

　　"On the other hand, there are several strategic issues at the national level that require collaborative solutions," Harrington said. "Water resources are emerging as a strategic risk for the mining industry. As a critical and valuable input, the growing scarcity of water poses a threat to the sustainable development of enterprises. Mining activities are constrained by the geographic distribution of mineral resources—resources that are predominantly located in watershed regions already facing water shortages—and cannot be relocated to areas with more abundant water supplies. Consequently, long-distance water transfers have become essential."

　　“The growing demand across all industries, stringent regulatory standards, and the deteriorating quality of water supplies for residents have all intensified the pressure on mining companies to ensure a stable water supply and give back to local communities. As a result, mining companies are prioritizing the protection of both the quantity and quality of water resources—even if this means limiting production—and are increasingly compelled to engage in cross-sector collaboration to stabilize and maintain water resource systems,” Harrington explained.

　　To address these challenges, Harrington pointed out that the mining industry has played a central role in large-scale public-private partnership water infrastructure projects—particularly the Vaal Gamagara Water Supply Scheme in the Northern Cape Province and the Lebalelo Water User Association scheme in Limpopo Province.

　　On the issue of climate change, Harrington stated that the mining industry needs a balanced, moderate, and pragmatic climate policy. She emphasized that a just energy transition must enable the mining sector to simultaneously make investments, compete effectively, and achieve decarbonization. The mining industry continues to advance energy efficiency improvements, technological innovations, and sustainable investments to reduce its climate and environmental impacts. To date, the mining sector has already brought online over 1.8 gigawatts of clean energy capacity, supporting decarbonization, energy security, and cost stability. Expanding clean energy capacity faces challenges such as limited access to capital, technological constraints, and inadequate transmission infrastructure. However, the mining industry is actively collaborating with stakeholders to scale up the deployment of clean energy across the entire sector.

　　In this context, the South African Mining Council expresses deep concern about the real risk of double taxation arising from South Africa’s carbon budget and carbon tax instruments.

　　“Under the current design, companies will not only have to pay an independent carbon tax but also face a punitive fine of 640 South African rand per tonne of CO2 equivalent for emissions exceeding their carbon budget—yet there are no clear exemptions to prevent the same emissions from being taxed twice,” Harrington explained.

　　She added that this would result in a double layer of carbon pricing for the same activity, placing a heavy burden on mining operations already facing significant cost pressures. “The South African Mining Council believes that this complex and unnecessary mitigation system requires urgent attention.”

　　Finally, Harrington emphasized that the European Union’s Carbon Border Adjustment Mechanism (CBAM, or carbon tariff) presents South Africa’s mining industry with another pressing, parallel challenge. “South Africa has already established a robust carbon pricing system, including carbon tax payments, a well-regulated offsetting mechanism, and carbon budget penalties,” she said. “If the CBAM fails to adequately recognize these mechanisms, it will result in double taxation at the border, leading to capital flight from South Africa’s decarbonization sector and undermining the industry’s global competitiveness.”

　　“CBAM must never become protectionism disguised as climate ambition,” Harrington emphasized. “With proper recognition and fair transition arrangements, South Africa’s mining sector can accelerate its decarbonization journey while maintaining mine operations, safeguarding jobs, and continuing to attract investment—fully leveraging its available resources, including coal.”

　　Growth Partnership

　　Tebello Shabana illustrated how mines can forge partnerships with stakeholders to drive sustainable growth. He specifically highlighted the Badirammogo Water User Association in Limpopo Province, noting that the association has completed the commercial handover of Phase One of the Olifants River Management Programme—a R8.5 billion project funded equally by public and private sectors, based on shared responsibility, co-governance, and joint outcomes.

　　The second collaboration case mentioned by Shabana involves the Department of Water and Sanitation and the Vaal Central Water Board. Through the Vaal Gamagara Water Supply Scheme, the two parties are jointly ensuring a continuous water supply for communities, mines, and businesses in the Northern Cape Province.

　　The first phase of the project, which involves renovating a 400-kilometer section of pipeline stretching from the Vaal River to remote areas in the arid Northern Cape Province, was completed in 2023.

　　Shabana added that, with the support of the South African Minerals Council, the Department of Water and Sanitation, and the Vaal Central Water Board, mines in the Northern Cape Province are launching the second phase of pipeline renovations, which will cost 12 billion South African rand. Half of the funding will be borne by mining companies.

　　Mines in the Northern Cape Province have invested over 74 million South African rand to ensure that water can continue to be delivered through increasingly aging pipelines. These mines will consume nearly half of the water transported via this pipeline, while the remaining portion will be allocated to local communities and other businesses.

　　The third collaborative project highlighted by Shabana is the renovation of the steel bridge in Steelpoort Valley, Limpopo Province. Eight mining companies are working together with the Roads Agency Limpopo to advance this project. The existing steel bridge will be refurbished and converted into a pedestrian crossing, with total costs exceeding 120 million South African rand.

　　“The steel bridge, which has been renovated and repurposed as a pedestrian crossing, will improve transportation conditions in the local community, enabling residents, workers, and schoolchildren to cross the river more safely and conveniently,” Shabana explained. “This new bridge is also expected to stimulate economic activity in the region by facilitating the transport of goods and people between the mine and nearby towns.”

　　Shabana addressed a common question: Why don’t mining companies undertake joint projects more frequently? “Unfortunately, regulatory challenges are a major impediment,” he said. “In addition, different mines face distinct financial, managerial, stakeholder, and other challenges.” He added, “The development prospects of a mine that has been in operation for three years are entirely different from those of a mine that has been operating for 20 years.”

　　“We need to start examining regulations that can eliminate these disparities and promote stronger cooperation among mining companies,” Shabana suggested.