South Africa’s Mineral Resources and Energy Department Budget Vote: 2023/24 – An Overview

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south africa mineral resources

Minister Gwede Mantashe delivered the Mineral Resources and Energy Department’s comprehensive Budget Vote Speech, outlining the achievements and strategies for South Africa’s mining and energy sectors amidst various global and domestic challenges.

Focus Areas

The primary focus areas of the Department include improving the country’s electricity infrastructure, supporting renewable energy projects, and promoting investments in the mining industry.

Universal Electricity Access

The South African government aims to provide universal electricity access for low-income households by connecting 917,000 households to the grid. The remaining 243,054 households are expected to be connected by the end of the current financial year, in line with the United Nations’ Sustainable Development Goal 7.

Electricity Sector Reform

The Electricity Regulation Act has been amended to establish a transmission systems operator (TSO) to address the much-needed reform in the electricity sector. The government has procured 7,786 MW of renewable energy through Renewable Energy Independent Power Producer Procurement Programmes (REIPPPP) and the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

Grid Availability Challenge

The lack of grid availability hinders the country from adequately addressing the energy crisis. The Integrated Resource Plan (IRP) 2019, South Africa’s policy for electricity generation, is under review to address this issue. In the meantime, additional electricity generation capacity will be procured, including renewable energy, battery storage, gas-to-power, and nuclear energy.

Mining Industry Contribution

The mining industry contributes significantly to the country’s GDP, with an increase in production value to R1.18 trillion in 2022 and 23,552 jobs created between December 2021 and December 2022. The mining sector contributed R89 billion in corporate tax and R28.45 billion in royalties for the 2021/22 financial year.

Investment Attractiveness

South Africa’s investment attractiveness index has been negatively impacted by electricity, rail, and port system constraints. To improve transparency, the government is working with the State Information Technology Agency (SITA) to implement a new licensing system.

Investment Projects

The Department is pursuing various investment projects in the mining and energy sectors, with a total investment value of R397 billion. These investments demonstrate the potential of mining and energy as growth industries in South Africa.

Exploration Strategy

The Department launched an exploration strategy in 2022 to attract at least 5% of the global exploration spend by 2025. To support this objective, the Department is collaborating with the Industrial Development Cooperation (IDC) to establish an exploration fund of R500 million for junior miners.

Budget Allocation

The Department’s budget for 2023/24 amounts to R10.7 billion, with R8.5 billion allocated for transfers to public entities and implementation agents. This budget includes R6 billion for the Integrated National Electrification Programme (INEP) to continue providing electricity access to households.

The Budget Vote Speech highlights the need for cooperation and support from various stakeholders to achieve South Africa’s development goals in the mining and energy sectors. The outlined strategies and investments aim to ensure sustainable growth and development in these critical industries.

A Russian-Spanish journalist and Cape Town native, channels his lifelong passion for South Africa into captivating stories for his local blog. With a diverse background and 50 years of rich experiences, Serjio's unique voice resonates with readers seeking to explore Cape Town's vibrant culture. His love for the city shines through in every piece, making Serjio the go-to source for the latest in South African adventures.

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