While the global energy transition has sparked a greater demand for critical minerals, access to capital and a lack of incentives have made it challenging for African mining companies to embark on exploration projects and take advantage of this high demand.

To address these challenges, financial institutions and stock exchanges can play an important role in providing funding, and investment opportunities, for African mineral projects.

To this end, the JSE aims to facilitate the flow of capital to support innovations and sustainable mining ventures across South Africa and in the rest of Africa, bearing in mind that about 30% of investment in JSE-listed companies stems from offshore investors.

The stock exchange aims to use this year’s Investing in African Mining Indaba as an opportunity to participate in discussions, connect with industry roleplayers and foster client engagements to get a better understanding of individual needs in terms of capital raising.

“Through our engagements with various stakeholders, we aim to make the South African mining industry more attractive for foreign direct investment to develop local exploration projects and facilitate broader incentives,” says JSE primary markets business development manager Patrycja Kula-Verster.

In line with this year’s theme, titled ‘Embracing positive disruption’, she says the JSE is also “disrupting itself” through its creation and facilitation of new ways of raising capital for junior miners.

The JSE established an accelerator programme in 2023 with mining employers organisation Minerals Council South Africa to educate mining companies on the implications of capital raising.

The stock exchange is also working with Minerals Council South Africa and the Department of Mineral Resources and Energy to create a proposal for tax incentives that can be applied to the mining sector. The proposal is being finalised and is specifically customised for the South African market.

“Incentives can, for example, help drive more junior mining activity in South Africa where there are around 6 000 dormant mines. There is a lot more that can be explored and incentives can help drive such exploration, increase the gross domestic product and drive economic development.”

Positive disruptions in the African mining industry include environmental, social and corporate governance (ESG) factors.

To help South African mining companies navigate ESG reporting standards, the JSE’s Sustainability and Climate Disclosure Guidance document – released in 2022 – explains relevant global standards on sustainability and climate change and is aligned towards a local context.

“ESG investments are expected to reach around R53-trillion, which is close to half of the world’s global institutional assets,” Kula-Verster notes.

Further, as noted in Engineering News Online in November 2023, the JSE launched its new Voluntary Carbon Market, which enables for the trading of carbon credits and renewable-energy certificates, locally.

“One cannot ignore the role of sustainability-linked finance instruments in heavy industrial decarbonisation projects. The sustainability finance market continues to evolve, thereby creating more financing options to help raise capital and meet industry goals. The JSE’s fixed income sustainability segment has seen phenomenal growth with over 70 issuances since 2021 and a total capital raise in access of R40-billion.