South Africa is abundant in natural resources and has its eyes set on charting an unprecedented story of growth and development, for which it hopes to garner India’s support.
The South African government’s recent decision to ease mining regulations and privatise infrastructure throws open new opportunities for Indian business and industry leaders to explore new shores for setting up manufacturing and skill-transfer units.
"South Africa is a large and developed economy within Africa. It has very well-established mineral reserves and resources, along with very well-developed infrastructure, be it road, rail, or ports, which can handle large volumes of commodities. It also has a very good way of conducting mining operations with very good regulatory frameworks," elaborated Nitin Agrawal, Group Chairman of Oza Holdings, which has assets in the mining and manufacturing sectors.
Agarwal was part of a delegation of the G20 Young Entrepreneurs Alliance in South Africa recently, where Indian Consul General in Johannesburg, Mahesh Kumar, hosted the group for interactions with local business leaders, government representatives and business school leaders.
South Africa holds the Presidency of the G20 this year.
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Talking about the scope for Indian businesses to grow and benefit from the opportunities in the country, Kumar said the South African government had embarked on a major venture to iron out challenges and deterioration in infrastructure that has been hampering progress in the mining sector.
"Anyone can obtain a licence to prospect and search for minerals or to mine these minerals, which is a unique proposition when compared to other economies," Kumar informed the delegation.
Taking the instance of ferro alloy production, the Consul General said that while larger bloated businesses were exiting the country, Indian businesses, which have traditionally been nimble, have been able to operate in challenging environments.
"This provides Indian businesses a unique ability to survive when the times are tough in challenging environments and flourish when the going is good. We believe that has led Indian businesses to do very well over the years in South Africa as well," he said, citing the examples of the pharma, IT, mining, and secondary steel industries in South Africa, the latter, he added, was being dominated by Indian players.
Throwing light on the “significant improvement” in the country within rail and port operations in 2025, the senior official said further development in port and rail connectivity will prove to be a boon for mining companies and help improving their overall competitiveness in the global market, especially after the recent privatisation programme undertaken by South Africa in the mining sector.
"We believe a large portion of the rail services and rail capital equipment will be sourced from India. Since Indian companies have railway manufacturing facilities, some of these will be leveraged by South African businesses as this privatisation programme is rolled out. Challenges in the country that comprise power and water shortage could be addressed by Indian businesses,” he added.
For a “skills-short” nation like South Africa with a large young workforce, India can help transfer skills to the youth and create new partnerships with South African business houses.
"We believe that the India-South Africa partnership in respect of mining and infrastructure investment will grow with capital machinery coming from India. Over the last few years, we have observed that automobiles and mining machinery was traditionally a Eurocentric business, whereas now, the industry has focused on the East, with India and China dominating these markets,” he said.
Kumar said the diamond cutting and polishing business was set up in the IDZ (industrial development zone), which is what the government of South Africa seeks – investment into beneficiation, local skills transfer, and local employment along with benefiting Indian businesses to set up manufacturing units here.
"So overall, it's not just minerals or investment in infrastructure, but ancillary items too which will see growth. We believe that Indian businesses will have a major role to play in this growth," Agrawal said.
Consul General Kumar also invited Indian business to come forth with solutions that could work for both South Africa and the southern African region as India explores new opportunities there.
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