South Africa's mining industry body has raised concerns that a new government strategy could discourage investment in the sector.

Minerals Council South Africa CEO, Mzila Mthenjane published a statement responding to the "Industrial Development Strategy 2026," released in June by the Department of Trade, Industry and Competition.

He said mining remains "the backbone of South Africa's economy" and warned that lawmakers must tread carefully to avoid damaging investor sentiment.

Mthenjane acknowledged the strategy creates opportunity but flagged two specific concerns: proposed restrictions on chrome ore exports and associated tariffs, and a requirement linking mining rights to beneficiation — the processing of raw minerals into finished goods.

"Quite simply put, these are not proposals that will attract much-required investment in the mining value chain, such as mineral exploration, the development of new mines or sustained investment in existing operations, and most likely will not invite investment in beneficiation processes," Mthenjane said.

He questioned the logic of the approach directly: "Must an investor interested in manufacturing also invest in a mine? Such as an auto manufacturer investing in iron-ore mines and steel mills?"

His central argument is that mining and beneficiation are separate industries. Beneficiation, he said, belongs in manufacturing and downstream industrialization — not bolted onto mining rights. He called instead for targeted incentives to stimulate domestic manufacturing and boost demand for South African-produced minerals.

The stakes are high, according to Mthenjane. He argued that recent policy reforms in electricity and logistics have put South Africa on a path toward economic recovery, and warned the new strategy could undo that progress.

Government capacity is part of the problem, he said. "At a national level, we are concerned that government departments such as Trade, Industry and Competition; Mineral and Petroleum Resources; Agriculture; and Transport, which are all essential to creating a vibrant industrial economy, are poorly resourced with a mere collective budget of R22-billion," Mthenjane said.

He also criticized the process behind the proposals. "We note with concern the limited inter-departmental consultation on the proposals that could negatively affect mining, including restrictions and taxing of chrome exports," he said, describing the export restrictions as a "blunt instrument."

Manufacturing's decline underpins much of his argument. Mthenjane pointed out that manufacturing's share of GDP has fallen to about 13%, down from 24% in 1990 — a decline he attributed to high electricity costs, past load shedding, weak logistics, water disruptions and failing municipal services.

"Imposing beneficiation obligations and export restrictions on mining companies will not address those constraints," he said.

His proposed fix centers on lower electricity tariffs, stronger exploration incentives, better-functioning special economic zones and deeper regional economic integration. He also called for faster private sector involvement in electricity, logistics and water, alongside progress on municipal governance, crime and corruption.

Mthenjane placed the blame for slow growth squarely on leadership rather than the mining sector itself. "Our low economic growth challenge is not because of a lack of beneficiation or our exports of minerals, nor an electricity, logistics and crime and corruption crisis. It is a leadership crisis that has failed to put the interest of the people of South Africa first," he said.

The Minerals Council says it is developing its own investment and growth strategy for the industry and working with stakeholders toward a more favorable operating environment.

"We look forward to a constructive engagement with the dtic for a whole country play in the Industrial Development Strategy," Mthenjane said.