Cape Town’s mining indaba hypes investment while many bear the cost

Cape Town has once again become a theatre of extractive optimism. Ministers will stride onto stages, CEOs will proclaim resilience, and the Minerals Council will assure us, once more, that “mining is not a sunset industry”, that reforms are accelerating, and that South Africa is on the brink of a new era of growth.

The Department of Mineral and Petroleum Resources, for its part, is already warming up the promotional engines:

• The PIC’s R1.35-billion commitment to early stage mining.
• The Department of Mineral and Petroleum Resources and IDC’s R400-million “Junior Mining Exploration Fund”.
• Breathless countdown videos urging SA to “watch this space”.

You would be forgiven for thinking a renaissance is unfolding. Beneath the choreography of the African Mining Indaba, however, lies a reality the sector does not want to discuss, and that the government no longer seems institutionally equipped, or politically willing, to confront.

Gap between what mining says and what it does

The Minerals Council insists mining is poised for lift-off. Its CEO argues that the industry is vibrant, growing, and indispensable to SA’s economic renewal. The message is simple: just trust us, loosen the constraints and investment will flow.

But a decade of actual financial data tells a different story.

Using PwC’s SA Mine ten-year summaries, SA’s listed mining companies show:

• Explosive profit growth between 2019 and 2021, driven by global commodity cycles.
• Tax contributions that rise modestly, and then collapse, completely decoupled from profitability.
• An effective tax rate that has structurally declined, even during the most profitable period in modern mining history.

Drawn from PwC SA Mine2025.

Anglo American’s corporate redomiciling, treated as a routine restructuring by the company, should alarm anyone serious about the country’s economic sovereignty and fiscal trajectory. Anglo did not merely move its corporate mailbox as it would have us believe, instead it is moving taxable profit, governance accountability and decades of accumulated leverage out of SA’s jurisdiction.

It is the clearest bellwether of what we must expect from the frenzied hype presented to us as investments in the future, but which really signals a rising tide of extraction at the expense of the most vulnerable.

The fiscal leakage the indaba will not discuss

Across the past decade, aggregated mining profit surged from R32-billion in 2019 to nearly R300-billion in 2021. Tax contributions did not even pretend to keep pace. By 2025, the sector reported a nominal effective tax rate of only 25% of profits, even after an extraordinary windfall period. Set against turnover, that contribution falls to roughly 4.5%, with the remaining 95% carried outward through profit shifting, allowances and offshore flows.

When you incorporate royalties, barely R8.4-billion in 2020 and typically below R10-billion in most years, the imbalance becomes stark: royalties remain stuck in single-digit billions while industry profits routinely surge into the triple-digit billions, reaching R208-billion at the height of the boom.

The minister of minerals will not raise this in his keynote remarks. The Department of Mineral and Petroleum Resources will not interrogate it in its investment pitches. The indaba will not put it on a panel. But the public should.

The false dawn the Minerals Council is selling

In its press statements, the council calls for faster regulatory reform, more exploration incentives, and “certainty” for investors. Yet the only certainty South Africans have inherited is:

• Rising environmental liabilities.
• Collapsing mining towns.
• Municipalities hollowed out by disinvestment.
• Communities living beside unrehabilitated land and abandoned shafts.

If the industry were a genuine engine of national development, the tax graph of the past decade would arc upward with profit. Instead, it diverges like a broken railway line that shows profit rising steeply and tax (including community benefit and employment) slipping downward.

Capital first, accountability later

The Department of Minerals and Petroleum Resources’ messaging leading up to the indaba is telling. Its message is not about governance, community rights, environmental thresholds or regulatory integrity.

Instead of seeking to regulate and protect our common heritage, and inviting in only those committed to ensuring shared wealth and prosperity, the department, like a sleazy salesperson, has crafted a message that is about “unlocking” and “accelerating” access to our limited resources.

Investment is framed as development.
Risk is framed as opportunity.
Communities are framed as beneficiaries.

But in Kriel, in Stilfontein, in Sekhukhune, and across the mining belt communities know better. They have lived through the “unlocking”. They have inherited the liabilities. When extraction ends, it is not capital that stays. It is the people, and the costs transferred to them.

The department can announce R1.35-billion here, R400-million there, but without a governance architecture that protects communities and secures public value, capital commitments are not strategy. They are subsidies for private gain, washed in the language of national interest.

Future being sold

The indaba is a marketplace. What is being sold is the future.

In Selling the Family Silver, I showed that the indaba is not about development at all, but about conversion: turning national inheritance into liquidity, recasting sovereignty as mere administrative discretion, and shrinking the affected people’s right to decide into elite negotiation.

The Indaba is a place where mining-affected communities are not participants, but props, invoked rhetorically, excluded structurally and expected to be grateful for the crumbs of “development” extracted from their own inheritance.

SA can no longer afford a mining regime in which profits leave the country with ease while liabilities settle on weakened municipalities, abandoned communities and an already overburdened fiscus. Reclaiming sovereignty over our mineral wealth demands a structural shift in how extraction is governed and who is protected when it ends.

That shift begins with a Public-Interest Exit Test to ensure no mine can close, sell, restructure, or redomicile offshore without demonstrating, publicly and enforceably, how workers, communities, and environmental obligations will be safeguarded. It also requires a fiscal architecture that links profit to contribution, preventing multinationals from using losses, allowances and offshore flows to separate what they extract from what they owe. And it demands a democratic correction: communities must hold binding consent, not merely be consulted, over decisions that determine their land, water, health and long-term prospects.

None of this will be heard at the mining indaba, a platform fluent in the language of investment but silent on governance, consequence and intergenerational harm. South Africa cannot build its future by treating its inheritance as disposable revenue.

If mining wishes to remain part of that future, it must abandon the habits through which it has appropriated the country’s wealth and recognise that this inheritance belongs to the people, not the industry that extracts it. DM