South Africa

South Africa exists because of what lies beneath it. In 1867, children playing near the Orange River found shiny stones that sparked a diamond rush bringing 50,000 prospectors to Kimberley. Within three years, the discovery of diamond-bearing rock on Johannes Nicholas de Beer's farm caught the world's imagination. Nineteen years later, an Australian prospector named George Harrison stumbled upon gold outcropping at Langlaagte farm—the edge of the Witwatersrand reef, soon revealed to be the largest gold deposit ever discovered. By mid-1886, an army of diggers had descended on the ridge, hacking along a line that stretched 40 miles. Johannesburg was proclaimed a town in 1887.

The mineral wealth arrived with geographic constraints that shaped everything that followed. Unlike California's placer gold, Witwatersrand ore lay thousands of meters deep in poor-quality deposits. Extraction required industrial capital on a scale individual prospectors couldn't provide. By the mid-1890s, a half-dozen mining houses controlled the entire goldfield, commanded by "Randlords"—Cecil Rhodes, Barney Barnato, Alfred Beit, J.B. Robinson—who raised millions from European and American investors. The Johannesburg Stock Exchange opened in 1887, just a year after gold's discovery, becoming Southern Africa's financial hub. By 1898, the Witwatersrand produced a quarter of the world's gold. European investment in South Africa equaled all European investment in the rest of Africa combined.

This concentration of capital created the template for South African industrialization: massive extractive enterprises requiring huge labor forces, managed by a small capital-owning elite. Railways, ports, and financial services developed to serve mining. The Chamber of Mines coordinated labor recruitment across southern Africa. The political structures that followed—including apartheid's elaborate labor controls—emerged directly from the mining economy's particular demands for cheap, controlled, migrant labor. When the world finally forced political transformation in the 1990s, the economic structure built on extraction remained largely intact. Anglo American, De Beers, and the mining houses retained their centrality.

Today South Africa confronts the consequences of that path dependence in the form of infrastructure collapse. The electricity system that powered mining expansion has crumbled under decades of mismanagement, corruption, and underinvestment. Eskom, the state utility, imposed 83 days of load shedding in 2024 after three years of increasingly severe blackouts. In February 2025, multiple failures at Majuba and Camden power stations forced Stage 6 cuts without warning. The 2023 crisis alone cost an estimated 1.5 percentage points of GDP growth; growth limped to 0.58% in 2024. Mining persists—gold and platinum group metals generated crucial export revenue in 2025—but energy-intensive smelters face electricity costs double their international competitors. The iron, steel, and ferrochrome industries have effectively collapsed. Unions warn that rising Eskom tariffs are "bleeding us dry."

Yet adaptation is occurring outside the grid. Rooftop solar capacity surged 276% between December 2023 and December 2024, reaching 6,165 MW as households and businesses abandoned Eskom. This distributed generation, more than any grid improvement, explains the reduction in load shedding. Eskom may achieve its first profit in eight years in 2025—partly because demand has fled. The irony is precise: the utility's financial recovery comes from customers no longer needing it.

By 2026, South Africa faces a defining choice: stabilize the grid fast enough to enable renewed industrial growth, or watch the economy permanently bifurcate into those who can afford their own power and those who cannot. The minerals remain—South Africa still holds the world's largest reserves of platinum group metals and significant gold deposits. The question is whether the infrastructure to extract and process them can be rebuilt before the opportunity window closes, or whether the mining economy that created modern South Africa will finally exhaust the systems it built.