South Africa’s Green Hydrogen potential faces hurdles
By Staff Writer
THE African Green Hydrogen Report says South Africa has the potential to be a significant player in the sector, but the country has to first overcome some hurdles.
Published by the German development agency, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the report looked into Africa’s potential to develop a Green Hydrogen industry.
Green Hydrogen is the practice of using electrolysis to extract hydrogen from seawater, and the report said South Africa had enormous potential when it came to fostering a Green Hydrogen industry, as it had all but 3 of the 22 critical minerals needed to develop the industry.
It said the country’s capacity to process resources locally to increase the economic value of exports was an advantage, but also pointed out that issues like an electricity supply crisis, rapidly escalating electricity prices, and logistics bottlenecks have led to a reduction in the size of the iron and steel and ferroalloy industries.
This was in spite of beneficiation being a policy objective in South Africa since the late 2000s. It pointed out that despite the country historically being a “mining powerhouse,” since the mid-2000s, mining production has been trending downwards.
The report said this downward trend was a result of the depreciation of South Africa’s gold mines, labour unrest, an electricity supply crisis and sharply increasing electricity costs, and logistics bottlenecks. Policy and regulatory uncertainty, and the lack of an efficient system for managing mining rights and applications, also contributed to the decline.
“South Africa‘s attractiveness as a mining location is falling relative to other Sub-Saharan African countries, and its global share of exploration is falling from a high of 5% during the early 2000s to around 1% currently,” the report said.
Even so, despite the decline in mining production and the slow uptake of beneficiation, the report said the Green Hydrogen industry was an opportunity to revive the local mining sector.
“The rapidly increasing demand for minerals to supply green energy technologies, coupled with South Africa’s rich endowment of many of these minerals and its extensive mineral extraction and processing experience, however, is seen as an opportunity to revitalise the South African mining industry.”
The report noted that President Cyril Ramaphosa included harnessing critical minerals for inclusive growth and sustainable development as one of his four priorities for South Africa’s presidency of the G20 in 2025.
He also called for a G20 framework on green industrialisation and investment to promote the beneficiation of critical minerals close to their source of extraction.
“The processing of critical minerals to support the energy transition is currently concentrated mainly in China, but the distribution of critical minerals shows that Africa has an opportunity to grow its mining sector due to increased demand for Green Hydrogen and Green Hydrogen related renewables sector goods.”
This message was echoed by Minister of Electricity and Energy, Kgosientsho Ramokgopa in the report’s foreword.
“Under the banner of the African Union’s Agenda 2063 and South Africa’s G20 Presidency, we are advancing a vision of energy that is just, inclusive, and transformative. This report aligns with our shared commitment to three pillars: energy sovereignty, social equity, and regional integration.”
