South Africa: Horizontal linkages— Building expertise by overcoming country-specific constraints

This case study examines the development of horizontal linkages in South Africa's mining sector, highlighting how specialized expertise gained from overcoming unique geological and technical constraints allowed local suppliers to diversify into other industries and international markets. It notes that these linkages were primarily driven by market forces and private sector innovation rather than government policy, though recent policy uncertainty and skills shortages have challenged the sector's competitiveness.

• Horizontal linkages in South Africa's mining sector were primarily driven by market forces and private sector involvement rather than government intervention.
• The unique scale and technical challenges of South African mineral deposits necessitated the development of specialized local equipment and techniques, which later formed the basis for horizontal linkages. For example, the need to wash poor-quality coal led to the development of spirals for washing, a technology now used in Canada's oil sands.
• Industry cooperation through the Chamber of Mines and its research arm, COMRO, enabled the pooling of skills and funds to develop complex technologies, such as integrated all-water-based hydraulic mining extraction for deep gold deposits.
• Geographical clustering around Johannesburg and the Witwatersrand facilitated the growth of upstream linkages and spillovers between mining houses and suppliers of metallurgy, machinery, and electrical equipment.
• South African mining suppliers diversified into construction, agriculture, and general manufacturing, or expanded internationally, when gold reserves became depleted and mining activity declined in the 1990s.
• The mining sector's relative contribution to GDP has declined from 20 per cent in the 1980s to approximately 7 per cent, while manufacturing has dropped from 20 per cent in 1994 to roughly 12 per cent.
• Current government policies focus on correcting apartheid-era socioeconomic imbalances through local content frameworks—including ownership participation and preferential procurement—rather than explicitly targeting horizontal linkages.
• The sector currently faces challenges from policy uncertainty regarding mining rights and ownership, as well as a critical skills shortage exacerbated by aggressive recruiting from competitors, particularly from Australia.

APA

Dolo, S., Odendaal, M., & Togo, G. (2018). South Africa: Horizontal linkages— Building expertise by overcoming country-specific constraints. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-south-africa-horizontal-linkages.pdf

Chicago

Dolo, Somine, Martin Odendaal, and Guire Togo. South Africa: Horizontal linkages— Building expertise by overcoming country-specific constraints. International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-south-africa-horizontal-linkages.pdf.

Wikipedia

{{cite report |last1=Dolo |first1=Somine |last2=Odendaal |first2=Martin |last3=Togo |first3=Guire |title=South Africa: Horizontal linkages— Building expertise by overcoming country-specific constraints |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-south-africa-horizontal-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dolo2018south, author = {Dolo, Somine and Odendaal, Martin and Togo, Guire}, title = {{South Africa: Horizontal linkages— Building expertise by overcoming country-specific constraints}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-south-africa-horizontal-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }