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South Africa Energy Minerals and Petroleum
https://photius.com/countries/south_africa/economy/south_africa_economy_energy_minerals_and_~2472.html
Sources: The Library of Congress Country Studies; CIA World Factbook
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    South Africa has the world's largest known deposits of chromium, manganese, and vanadium, as well as significant deposits of iron ore, antimony, copper, nickel, lead, titanium, fluorspar, zinc, and zirconium. Most of these metals are exported unprocessed, with the exception of iron ore, which is also used in the local steel industry.

    South Africa's chromium deposits contain about 72 percent of the world's reserves, most of it in the Bushveld complex of minerals. In 1993 its mines produced 2.8 million tons of chromium, or about 32 percent of world output--down from 4 million tons in 1989; production recovered, to roughly 3.6 million tons in 1994. Used primarily to produce stainless steel, chromium was one of South Africa's export successes in the 1980s; prices reached US$0.70 per pound but dropped sharply when producers tried to undercut each other in 1990. The government used various incentives, including export subsidies and power rebates to those who produced alloys for export, to encourage production. About one-third of chromium produced in 1993 was exported, much of it to the United States and Japan.

    South Africa contains the largest known deposits of manganese ore in the world. Its reserves of at least 12.5 billion tons, mostly in the Northern Cape mineral complex, constitute 75 percent of the world total. Manganese is essential in the manufacture of iron and steel, and more than 90 percent of South Africa's manganese is used for this purpose. During the late 1980s, production fluctuated slightly, but it remained between 3 and 4 million tons per year, while prices generally rose, nearly doubling in 1989. By the end of 1991, however, South African producers were forced to reduce prices in response to a weak international market. In 1994 more than 2.8 million tons of manganese ore were produced, roughly 17 percent of world output.

    South Africa produced between 25,000 tons and 30,000 tons of vanadium a year in the early 1990s, almost 45 percent of the world's supply. Its estimated 5.4 million tons constitute one-third of world reserves. The world's largest producer is a South African firm, Highveld Steel and Vanadium. The year 1989 set a record in terms of both production and exports for South Africa, but when world steel production declined, demand for vanadium dropped and prices plummeted, forcing one vanadium producer in South Africa to close down. Prices again surged in early 1995, and Highveld Steel and Vanadium expected earnings to more than double in 1995, compared with 1994. Vanadium is used in manufacturing steel, to provide tensile and torsional strength and resistance to abrasion.

    South Africa is the largest producer of iron ore on the continent, with reserves estimated at more than 9.4 billion tons. Iron is mined in the Northern Cape, the Bushveld, and the Transvaal complexes, and in KwaZulu-Natal. More than 29.3 million tons of iron ore, roughly 3 percent of world output, were produced in 1993. Almost half of that amount was used in the steel industry. A record 19.6 million tons were exported in 1994, much of it to Japan.

    Although small by world standards, South Africa's steel manufacturing industry is the largest on the continent (see Heavy Industry, this ch.). Steel production increased dramatically in the 1970s following the development of port facilities at Saldanha Bay and the associated rail line connecting it to the high-grade Sishen ore deposits in the Northern Cape. Projections for the use of steel in local construction were increasing as the government began to implement its Reconstruction and Development Programme in 1994. Government plans to implement stricter automobile emission standards promised another boost to the steel manufacturers, who produce stainless steel for use in catalytic converters.

    South Africa has only about 2 percent of the world's known copper reserves, with the largest deposits in the Transvaal complex in the northeast. Copper is also mined in the Northern Cape and the Western Cape. Mining costs are high, because of the high concentration of other minerals in copper ore. At the country's largest copper mine, at Phalaborwa, production decreased in early 1993, in part because of flooding that brought work in the mine to a standstill. Later that year, the mine owners received government permission to institute a seven-day workweek, and the mine increased its work force to extend operations. Nationwide copper production, nonetheless, fell from more than 176,000 tons in 1992 to about 165,000 tons in 1994, and copper exports decreased steadily, to roughly 82,000 tons in 1994.

    Energy Minerals and Petroleum

    Fortunately for South Africa, it is well endowed with coal and uranium for energy production, because the country apparently has no significant petroleum reserves and was officially cut off from oil imports from 1979 to 1993. Oil accounted for about 20 percent of primary energy until the early 1970s, and the government had stockpiled an estimated 18 million tons of imported oil by 1979. Although unreported oil shipments continued during the sanctions era, many industries switched to the use of coal to power generators.

    Imported crude oil is processed at four refineries--two in Durban, one near Cape Town, and one in Sasolburg, southwest of Johannesburg--with a combined distillation capacity of about 401,000 barrels per day, or 21.5 million tons per year. In 1994 the government invited international investment in oil and gas exploration for the first time since the 1960s. Minister of Mines and Energy Roelof "Pik" Botha announced the plan, saying that the government needed domestic energy sources for reconstruction and development. The state-owned Southern Oil Exploration Corporation (Soekor) also needed the investment capital to develop nine recently discovered small oilfields off the western Cape coast, and several other small wells near Mossel Bay.

    South Africa's coal reserves, most located in the Witwatersrand and in northern KwaZulu-Natal, were estimated to be between 60 billion and 100 billion tons, enough to maintain early-1990s levels of domestic use and exports through much of the twenty-first century, according to industry analysts. The coal occurs in seams, often less than one hundred meters below the surface, and hence it is relatively easy and inexpensive to mine. Most coal used locally is burned in generators at electricity plants; it is also used for coking in the steel industry.

    During the 1980s, Eskom, the government's electric power utility, was the coal industry's major customer. Eskom purchased about two-thirds of coal output, which fluctuated between 159 million and 176 million tons from 1984 to 1989. In the early 1990s, the coal industry produced more than 180 million tons of coal each year, of which at least 47 million tons were exported. The industry employed more than 76,000 people. Eskom helped to finance coal mining operations and guaranteed coal prices to ensure the mining companies' return on investment.

    International sanctions in the 1980s affected the coal industry in two ways. United States and European importers reduced their demand for South African coal exports, and South African homes and industries increased their use of coal in place of oil and other imported fuels. But in 1991 and 1992, as most sanctions were being lifted, the South African coal industry found itself facing stiff competition from emerging low-cost producers, such as Indonesia, Colombia, and Venezuela.

    South Africa is ranked fifth in world uranium reserves in the 1990s with recoverable reserves estimated at nearly 180,000 tons. Uranium is produced as a by-product of gold in some mines of the Witwatersrand, and as a by-product of copper in the Phalaborwa mines of the far northeast of the country. Since 1968 all uranium produced in South Africa has been processed and marketed by the Nuclear Fuels Corporation of South Africa, a private company owned by the gold mines that produce uranium. Output declined in the late 1980s, as operating costs increased and uranium prices hit a thirteen-year low. Uranium output averaged nearly 2,000 tons a year in the early 1990s. Exports of uranium declined from roughly 1.3 percent of total export revenues in the 1980s to roughly 0.2 percent in the early 1990s.

    South Africa produced substantial, but undisclosed, amounts of highly enriched uranium (HEU) in its nuclear weapons program, until that program was dismantled in the early 1990s. In 1994 the government, although a signatory to the Nuclear Nonproliferation Treaty (NPT), maintained stockpiles of HEU to produce industrial and medical isotopes, or to downgrade for use in power reactors.

    The government has sponsored extensive research and development in the production of synthetic fuels, and South Africa became a pioneer in extracting oil and gas from coal in the 1960s and the 1970s. The South African Coal, Oil, and Gas Corporation (SASOL) established three facilities between 1950 and 1982 and is considering building a fourth plant in the late 1990s. After 1979, when SASOL shares were offered to the public, most of the corporation was run as a private company, with government assistance in constructing new facilities. Officials did not release production figures to the public, but the SASOL plants were believed to be supplying about 40 percent of South Africa's liquid fuel needs in the early 1990s. The corporation received tariff protection when the price of oil dropped below US$23 per barrel and paid into a fuel equalization fund when prices exceeded US$28.70 per barrel. In addition to liquid fuels, the company produces chemicals, fertilizers, and explosives.

    Data as of May 1996


    NOTE: The information regarding South Africa on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of South Africa Energy Minerals and Petroleum information contained here. All suggestions for corrections of any errors about South Africa Energy Minerals and Petroleum should be addressed to the Library of Congress and the CIA.

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