KEY POINTS
- South Africa has fewer foreign ownership restrictions than many resource-rich countries.
- The country wants mining investment to support local processing, manufacturing and job creation.
- Angola is also introducing reforms to attract investment and expand commercial mining activities.
South Africa imposes fewer restrictions on foreign investors than many other resource-rich countries, according to a new report by international law firm Baker McKenzie.
The 192-page report examines investment policies and regulations across 20 countries, highlighting South Africa’s relatively open approach to foreign ownership and growing support for private-sector investment.
The report also notes that the country wants foreign investment to deliver more than capital for mining and other projects. It expects investors to contribute to local manufacturing, job creation and the development of domestic supply chains. South Africa is a major producer of platinum group metals, manganese, chrome and vanadium. Its critical minerals policy is increasingly focused on processing more of these resources locally instead of relying mainly on exports of raw materials.
Baker McKenzie partners Ryan Alho and Lydia Shadrach-Razzino, who contributed the report’s section on South Africa, said the government was working to improve the commercial prospects of downstream investment.
They identified support for exploration, stronger industrial infrastructure and increased local value addition as important parts of the country’s strategy.
South Africa also aims to become a regional processing and manufacturing hub by using its mineral resources and those available across Southern Africa.
However, the report warns that achieving this ambition will depend on the country’s ability to remain competitive.
Reliable electricity, efficient transport and logistics networks, affordable industrial power and a stable regulatory environment will be essential to attracting companies willing to invest in local processing facilities.
The report describes South Africa as one of the continent’s most developed energy and infrastructure markets, with substantial demand for new electricity generation, energy storage, transmission networks, logistics and water infrastructure.
It says the policy environment is becoming more supportive of private-sector participation, creating opportunities for investors.
However, the report identifies implementation as the main challenge.
The expansion of electricity transmission networks, liberalisation of the power market and replacement of ageing infrastructure will determine whether the country can turn investment opportunities into commercially successful projects.
The report also describes South Africa’s approach to decarbonisation as generally pragmatic.
Angola seeks to attract more mining investment
The report also examines Angola, the only other African country included in its assessment.
It says Angola is pursuing regulatory reforms aimed at removing practical barriers to investment and providing clearer opportunities for private-sector participation.
The country’s mining policy is focused on moving resources such as copper, cobalt, lithium, rare earths, niobium, manganese, phosphates, iron ore and gold into commercial production.
According to Miranda Alliance partners João Leite, Lília Tomé de Azevedo and Renato Guerra de Almeida, Angola’s strategy is already reflected in its mining agreements.
They cited an arrangement under which Glencore has contracted to purchase the first year’s copper production from the Tetelo project.
Angola is also promoting domestic processing through initiatives involving diamond polishing, steel production and the use of phosphates and dolomitic limestone in agriculture.
Global investment policies are changing
Baker McKenzie said investment policies across major global jurisdictions were changing rapidly as governments sought to strengthen energy security, develop industries, secure critical mineral supplies and support decarbonisation.
The report argues that the strongest investment opportunities are likely to emerge in countries where these policy priorities reinforce one another, rather than where investors are offered only a single attractive incentive.
