Anglo American CEO’s warning to South Africa by Shaun Jacobs

[Nat Quinn]

Anglo American CEO’s warning to South Africa by Shaun Jacobs

Illegal mining is one of the most serious challenges facing the mining industry, costing it billions of rands annually and using the cash to fund broader criminal networks and corruption.

This is feedback from Anglo American CEO Duncan Wanblad, who outlined the challenges facing the mining industry in his keynote address to the Investing in African Mining Indaba 2025.

Wandblad was very positive about the trajectory of South Africa, explaining that all indicators point towards a new era of prosperity for the local economy.

The formation of the Government of National Unity (GNU) and the significant improvement in performance from Eskom has created renewed optimism in Africa’s most developed economy.

Next on the list for Wanblad is the resolution of the logistics crisis in the country, which has improved marginally. Reform of the sector has moved ahead at a snail’s pace and lacks the urgency required.

One of the major challenges which has not been addressed adequately is the problem of illegal mining in South Africa.

Wanblad called on authorities to tackle this crisis head-on as it threatens the viability of legitimate mining operations and undermines the industry’s licence to operate.

“I cannot be ambiguous here. Illegal mining is precisely that – it is illegal. However, to address it effectively, we must understand its complexity,” Wanblad said.

“The challenge is driven by poverty and desperation on one end and control by sophisticated criminal syndicates on the other.”

Wanblad explained that these operations are worth billions of dollars annually and have connections to broader criminal networks and corruption.

The consequences are severe and go beyond the mining industry, with local communities being harassed by illegal miners and their personal safety put in jeopardy.

“The human cost is devastating – from fatalities in disused mines to the exploitation of vulnerable communities,” Wanblad said.

“However, the impact extends far beyond this immediate human toll and, of course, also deprives national treasuries of precious revenues.”

Wanblad made it clear that he was not referring to legitimate artisanal and small-scale mining, which play a vital role in the larger industry.

Instead, it’s about addressing both the criminal syndicates that threaten livelihoods and the socio-economic conditions that make illegal mining attractive to vulnerable populations.

Mineral and Petroleum Resources Minister Gwede Mantashe has estimated the impact of illegal mining on South Africa to be R60 billion a year.

Mantashe’s comments were made at a press conference following the final phase of an operation that began in October to force an unknown number of people out of the disused gold mine in Stilfontein.

“It’s a war on the economy. Until you show me something different about illegal mining, that they add value to the economy, I can’t change my approach,” he told Bloomberg in a separate interview.

The illegal industry has been prevalent in the country for over a decade but has rapidly expanded in recent years as individuals come under greater financial pressure.

This has been coupled with increased government inefficiency and regulatory changes, making it more difficult for traditional mining companies to open new shafts and continue operating their mines in South Africa.

Operating a mine in South Africa presents massive challenges, including volatile labour relations, disputes with surrounding communities, and organised crime.

The industry is also hamstrung by regulatory uncertainty, unreasonable delays in processing applications and infrastructure bottlenecks.

This has led to a growing number of abandoned mines, many of which have been closed by companies because they are not profitable.

These mines attract people from outside the country to make money by illegally mining minerals in disused shafts, which is incredibly dangerous.

Of the 1,576 people who were arrested after they resurfaced from the Stilfontein mine before the start of the rescue operation, only 21 were South African nationals, according to the police.

South Africa currently has 6,152 abandoned mines that have become hotspots for crime.

This has partly been driven by South Africa’s declining attractiveness as a mining destination. As a result, companies are not willing to invest in the country and have abandoned operational shafts.

South Africa’s mining industry has lost its shine in the past few decades, going from the top-ranked jurisdiction globally to among the worst.

The Fraser Institute, based in Canada, conducts an annual survey on the attractiveness of different countries as mining jurisdictions. These days, South Africa ranks among the ten least attractive mining destinations.

The financial ecosystem that supported junior miners in years gone by has also largely disappeared.

Local investors have limited appetite for supporting early-stage mining companies, and global investors have little appetite for investments in South Africa.

 

source:Anglo American CEO’s warning to South Africa – Daily Investor

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