Forging Mining Champions: A South African Initiative Takes On the Funding Gap

• New fund offers grants to Black-owned mining firms
• Targets the critical financing gap for local mining firms
• Program could serve as a model for other African nations

South Africa’s Department of Mineral Resources and Petroleum on Tuesday, Sept. 30, launched the second edition of its funding program for junior mining companies, providing a potential solution to a major obstacle facing emerging African miners.

Dubbed Junior Mining Exploration Fund (JMEF), the program seeks to address the difficulty local companies face in raising capital. For this year’s second edition, the JMEF’s total funding pool was raised to 240 million rands (about $12.7 million), up from 160 million rands ($9.2 million) awarded to eight companies in the first edition in 2024. The fund covers ten strategic minerals, including lithium, copper, and gold.

To qualify for funding, junior mining companies must hold at least one valid exploration license, be unlisted on any stock exchange, and be at least 51% owned and controlled by historically disadvantaged Black South African communities. The JMEF offers grants but reserves the right to take up to a 49% equity stake if a commercially viable deposit is discovered.

The South African initiative offers a relevant case study amid ongoing discussions in West Africa regarding local content policies. “The difference between an Australian junior miner and a Malian LLC, both with a gold exploration permit in Mali, is not technical expertise or geological skill, but simply access to finance,” Paris-based lawyer Charles Bourgeois told Ecofin Agency in a 2022 interview.

While Bourgeois argues that only the Johannesburg Stock Exchange currently provides a suitable environment for African junior miners to raise capital, Dr. Ahamadou Mohamed Maiga advocates for greater direct state support.

In a 2025 interview with Ecofin Agency, Dr. Maiga, who leads the extractive industries consulting firm Corexis, recommended that governments invest directly in local companies. “This notably involves mobilizing existing national resources, starting with deposit and consignment funds, which hold billions of CFA francs and are often underutilized. These structures could become true lenders for local enterprises, financing mining projects led by national entrepreneurs,” he said.

While South Africa’s experience shows that state support is possible, the amounts committed so far remain modest. By comparison, mining companies operating across Africa invested about $1.3 billion in exploration in 2024, according to S&P Global Market Intelligence. On the Australian and Canadian markets, a single junior miner active on the continent can often raise, in one transaction, as much as the JMEF’s entire 2025 allocation.

Emiliano Tossou