Understanding South Africa’s mining slowdown

Policy Paper 43

Abstract

South Africa’s mining sector presents a significant economic paradox: despite possessing a mineral endowment of global significance—particularly in platinum group metals (PGMs), manganese, and chromium—the industry has experienced a profound structural decline since the 1970s. This paper investigates the binding constraints that have prevented the sector from capitalising on global commodity booms and the green energy transition. Applying the Growth Diagnostics framework developed by Hausmann, Rodrik, and Velasco (2005), the study argues that the sector's decline is primarily endogenous, driven by human-made constraints rather than geological exhaustion.