The difficulties faced by the junior sector are clearly demonstrated by South Africa attracting less than 1% of global exploration expenditure in recent years compared to 8% in 2001. Among the constraints are the difficulties in attracting investment because of a perceived uncertain and unattractive regulatory environment. Among the report’s recommendations are that South Africa introduce a flow-through share incentive modelled on the Canadian model which has made that country a leading junior mining hub. At present, South Africa offers limited compelling incentives to attract foreign investors to fund mining projects. According to the Minerals Council, using the PwC Social Accounting Matrix Model, an effective flow through share tax incentive could generate R15.8 billion in tax revenue per successful mine - including royalties, income tax and withholding tax of R9.6 billion, and induced taxes of R6.2 billion. “By fostering a supportive environment, junior miners can drive exploration, a function previously driven in-house by majors. This exploration is vital for discovering the next generation of large-scale mines. A flourishing junior sector could create thousands of jobs, contribute significantly to the tax base and help create a new generation of mining capitalists,” the report states. While highlighting the complex environment and difficulties junior and emerging miners must traverse, the report notes positive developments initiated by the Department of Mineral and Petroleum Resources to revitalise the sub-sector. The regulator published its strategy on exploration in 2022, it has published a strategy document on critical minerals and metals in 2025 and has jointly launched an exploration fund which is attracting investments from large mining companies. One of the key obstacles is growing criminality and sophisticated cartels that are negatively impacting junior and emerging mining companies, requiring a far more focused and proactive response from the justice cluster as well as the DMPR, which has criminalised illegal mining activities in its draft Mineral Resources Development Bill. The report suggested established mining houses can play a significant role in supporting junior miners. Junior miners can perform critical exploration processes, which can support majors in growing their project portfolios. Majors hold critical skills and capacity that can be shared with juniors, which will lead to fewer mistakes and avoidance of the loss of scarce capital. n
The junior sector generates just 11% of total mining revenue.
The report suggested established mining houses can play a significant role in supporting junior miners.
JUNE 2026 | www.modernminingmagazine.co.za MODERN MINING 19
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