In order for mining to help drive South Africa’s next phase of economic growth, the perennial goal of freight reform must move from rhetorical promise to measurable reality.
Cape Town was the epicenter of the policy discussion in February. At the Mining Indaba, miners, financiers, and officials aligned on what is required to unlock investment: policy certainty, working logistics, and credible reform. Later, in Parliament, Finance Minister Enoch Godongwana gave his 2026 Budget speech, setting out in practical terms how the government intends to respond.
The question now is whether the new fiscal framework is adequate for the task at hand.
Mining is South Africa’s main source of foreign exchange. It accounts for just under 6% of nominal GDP – roughly R440 billion in direct economic contribution a year, according to the latest industry figures from the Minerals Council South Africa. In 2025, mineral sales rose by 7.3% despite weak global conditions, and the sector continues to be a significant employer, supporting around half a million jobs.
Mining also underpins the rail corridors that keep ports functioning. When corridors fail, it hits the economy directly: export earnings decline, the rand weakens, debt-service costs rise, and space for social spending narrows. A coal train that misses its slot on the Richards Bay line triggers a cascade in which stockpiles build, demurrage charges climb, ships depart half‑loaded or stop calling altogether, and competitors in Australia, Brazil or elsewhere secure contracts instead of South Africa.
Recent Minerals Council data and industry commentary show export volumes have fallen across key commodities. The issue isn’t demand – prices remain firm – but reliability. In a world of rising tariffs, assertive industrial policy and friend‑shoring, dependable delivery is a competitive edge. If South Africa can’t deliver consistently, it will continue to cede market share.
The government’s infrastructure drive is broadly on the right track, but its success will depend on what gets built. That’s where fiscal policy comes in.
South Africa plans to allocate R1 trillion to infrastructure over the next three years, mostly on transport. As an initial step, R21.9 billion has been cleared to fast-track five key projects, including fixing Transnet’s vital coal and iron-ore rail lines. In his Budget speech, the minister said the government is “dismantling bottlenecks in rail and ports that have throttled exports and raised the cost of doing business” and confirmed amended Public-Private Partnership regulations alongside a pipeline of 63 projects at various stages.
This direction broadly aligns with what investors have been asking for. Rail capacity targets are vital because they translate directly into higher export volumes. Retaining state ownership of the rail network while allowing private operators to run services is a proven model. At the same time, keeping debt just below 80% of GDP and gradually reducing it should help lower the sovereign risk premium embedded in project finance.
But investors don’t put money behind speeches or good intentions; they expect assets to perform. The R21.9 billion allocation makes a start but barely dents the estimated R65 billion logistics funding gap after years of under-investment at Transnet. If trains still miss slots and ships wait off Richards Bay for days, miners simply will not commit new volumes and lenders will not cut the risk premium.
The state cannot close the funding and operating gaps on its own; private sector participation must be part of the equation. The structure of that participation is critical: deals must be bankable, contracts need to define who carries which risks, concessions should run on open and competitive terms, and returns have to be predictable. Above all, the goalposts cannot be shifted midstream.
Retaining the state as network owner and leaving operations to the private sector is a proven model in many international ports, including Antwerp‑Bruges in Europe and several Gulf hubs that use landlord‑type port authorities and private terminal concessions. It works only if governance is clear and contracts spell out responsibility and performance, which means enforceable service standards, meaningful penalties, and appropriate profit-sharing mechanisms.
Mining houses, too, have a role to play. They cannot treat Transnet as something to bypass with trucks; if they want reliable rail, they must be corridor partners, with capital and offtake tied to reliability commitments.
Transnet has already signed a memorandum of understanding with the Port of Antwerp‑Bruges to support modernisation. The Budget provides the political mandate to translate the intent into binding concessions on priority freight corridors. If that does not happen, the economy will keep losing billions of rands to freight failures.
As the Treasury reins in borrowing and reduces debt, moving the budget into primary surplus, South Africa’s risk premium should begin to ease. Lenders will accept lower interest rates on government bonds, and investors will be more willing to fund projects, creating fiscal space for growth. The remaining test is whether we have the political will. Will the government allow private operators to set prices, manage assets, and earn returns commensurate with their risk? If it does, stable finances and functioning freight corridors could drive a revival in mining investment. If it doesn’t, capital will continue to favour more reliable markets.