Mining sector sounds alarm over soaring electricity costs

South Africa’s mining sector says electricity prices – which have risen by more than 900% since 2007 – remain the single biggest threat to competitiveness, investment and jobs, despite the absence of load shedding over the past year. According to Minerals Council South Africa, electricity tariffs for large industrial users such as mines, smelters and refineries increased by about 970% between 2007 and 2024 – with further annual hikes of around 8% expected this year, and again in 2027. Paul Dunne, president of Minerals Council SA and CEO of Northam Platinum, warns that the impact has already been severe.

“This has resulted in smelters closing or suspending operations because they are simply no longer globally competitive,” he says. These concerns were aired at a media conference on the sidelines of the annual Investing in African Mining Indaba in Cape Town on Monday. The four-day event is expected to draw about 12 000 delegates from around the world, including mining companies, governments, financiers and investors.

Beyond electricity costs, Minerals Council SA says a combination of infrastructure constraints, regulatory uncertainty and subdued exploration activity continues to weigh on sector performance. While mining production has stabilised, efficiency has deteriorated. According to Mineral Council SA’s Facts and Figures 2025 pocketbook, total factor productivity – a measure of how effectively labour, capital and materials are combined – has fallen below the benchmark of 100 since 2022. This indicates that the industry is producing less output per unit of input than it did a decade ago.