South Africa’s socio-economic challenges are well established: persistent unemployment, widening inequality, and a sluggish economy are converging to create a fiscal squeeze at the very moment when demand for social infrastructure is growing. Nowhere is this more visible than in education, where shrinking budgets have led to an escalating backlog in school infrastructure.
For example, in the 2022/23 fiscal year, the budget allocation for the Education Infrastructure Grant (EIG) was reduced by 11.5% compared to the previous year. Although this was essentially reversed in the 2023/24 fiscal year through an increase in the EIG allocation by 11.4%, cuts to the EIG and School Infrastructure Backlog Grant (SIBG) of R611 million and R1.2 billion, respectively, were approved by the Cabinet.
Budget cuts have been especially damaging in mineral-rich provinces such as the Northern Cape. At the start of the 2024/25 financial year, the provincial Department of Education absorbed a R232 million reduction, followed by a further R60 million cut later in the year. These reductions highlight the worsening fiscal reality confronting education departments nationwide.
The consequences are stark: thousands of learners are left in precarious conditions, particularly in former and current mining communities, while the education department remains under pressure to meet deadlines to address infrastructure requirements set in the 2013 Regulations Relating to Minimum Uniform Norms and Standards for Public School Infrastructure and the 2024 update thereof. In the Northern Cape, many schools remain unsafe or inadequate, from asbestos structures to a shortage of special needs facilities and overcrowded urban schools.
Yet, South Africa is simultaneously a country of immense mineral wealth. In 2024, the mining sector generated R833.9 billion in revenue. But as in many resource-rich nations, these profits rarely flow back into the communities from which they are extracted. That which does flow back must often be stretched between different development priorities, driven, to varying degrees, by community and political interests.
The so-called “resource curse” has deep roots in South Africa’s history, with mining both fuelling and benefiting from the exploitative structures of colonialism and apartheid. It entrenched inequality in the past, and today it must form part of the solution to addressing that inequality – a legislated objective as expressed in the Mineral and Petroleum Resources Development Act, 2002 (MPRDA).
This paradox presents abundant natural wealth alongside deep social infrastructure and socio-economic deficits. In response, legislated Social and Labour Plans (SLPs) and discretionary Corporate Social Responsibility (CSR) spending can ensure that some of the financial gains achieved in the extractive industries benefit the immediate communities where those gains are extracted.
Various initiatives on the mine’s part make this possible, enabled by comprehensive needs analysis, project identification and scoping, and collaboration to fund strategic projects in host communities. Education projects have the potential to be a notable part of these initiatives, making sure to avoid a common pitfall of merely patching over the broader collapse of public education infrastructure.
The core business of mining is the extraction of natural resources for financial return. Profitability in the sector is highly cyclical, shaped by global economic conditions that drive demand and influence commodity prices. In 2025, for example, the price of gold has risen sharply, supported by increased demand for bullion amid uncertainty around tariffs, the US economy, and the role of the dollar as a global store of value. While this has generated significant short-term profits for mining companies and investors, such price surges are temporary and should not be assumed to continue.
As a result, funding for SLPs and other CSR initiatives remains closely tied to annual revenue performance. Moreover, the long-term viability of any mining operation depends on sustained demand, access to mineable reserves, and favourable commodity prices. The current design of the SLP system falls short of achieving the MPRDA’s core objectives. In practice, SLPs and related CSR initiatives have not delivered outcomes that match the stated ambitions of the MPRDA and the Mining Charter.
One of the most critical flaws is the absence of a funder of last resort for long-term operations and maintenance. Too often, projects are completed and handed over without clarity on who will finance their ongoing costs. When provincial or municipal authorities inherit assets without budgetary provision in their medium-term expenditure frameworks, they cannot sustain them. This results in premature asset failure and the proliferation of “white elephants”.
Education illustrates this challenge clearly. While schools and educational facilities are a common focus of SLP investment, many are designed to align with municipal Integrated Development Plans. This creates a misalignment, as the responsibility for education and its infrastructure rests with the provincial government. Without coordination at the appropriate level, projects often lack long-term viability, leaving learners underserved and communities disillusioned.
Compounding these issues is the volatility of CSR and SLP funding itself. Because such spending is tied to company revenues, which fluctuate with commodity cycles, investment tends to be fragmented, short-term and uneven. Instead of building durable service delivery systems, the current model often produces temporary interventions that fail to resolve South Africa’s deeper social and infrastructure deficits.
An alternative approach to SLP implementation lies in linking planning more directly with investments in education infrastructure. Currently, feasibility studies, which should form the foundation of any sustainable project, are rare. Research by the Centre for Applied Legal Studies (CALS) on SLPs in South Africa found that in 2017, only 14% of SLPs included feasibility studies across all programmes, while 20% undertook to conduct them during the project cycle. More than half (56%) did not refer to feasibility analysis at all. This gap is critical, as proper feasibility assessments should identify deliverables, timeframes, partners, service providers, beneficiaries, expenditure, and exit strategies before a project begins.
Where feasibility is applied through structured frameworks such as the five-cases business model, SLP projects can shift from legislated compliance or discretionary CSR into genuine co-investment approaches. This would replace fragmented, ad-hoc projects with programmatic, lifecycle-managed infrastructure delivery capable of sustaining long-term benefits for communities. In education, schools and related infrastructure could be planned appropriately, financed, and maintained over their lifecycle, rather than being left vulnerable to commodity cycles and fluctuating revenues.
Mining companies must move beyond reactionary expenditure and towards feasibility- and bankability-driven planning. This is particularly important in education, where outputs such as classrooms built or clinics refurbished are insufficient without measurable outcomes. As noted by Lloyd Wallace, an experienced infrastructure consultant, “Impact is not just about outputs. It is about outcomes. Every social infrastructure project should have a clearly articulated set of strategic objectives linked to social and economic benefits”, and the sustainability of these projects should be baked into the planning and feasibility process.
This challenge is heightened by proposed amendments to the MPRDA, which seek to embed transformation obligations directly into legislation. By shifting from policy to statutory law, compliance thresholds for mining companies will rise significantly. Community development, historically driven through SLPs, will become a legal prerequisite for mining rights. To meet these requirements, companies must either increase investment or move towards collaborative, co-investment models with government and communities that can deliver sustainable infrastructure and measurable local economic development.
The Northern Cape Education Department has assembled a “shovel-ready” school project portfolio. In collaboration with Infrastructure South Africa, it has invested in making the projects bankable and investment-ready. Some of these schools are in the immediate communities of mines, providing low-hanging fruit for SLP- or CSR-driven investment for mining companies. Using spatial analysis, education departments can strategically align investments in school feasibility with proximity to mining operations.
The department remains the implementing agent, ensuring compliance with its standards and, crucially, retaining responsibility for operation and maintenance and staffing from the outset, as it will already be accounted for in the business case. It also provides a clearer exit strategy for the mining company, allowing it to make investments based on shorter-term revenues.
Mining companies have an opportunity to work closely with provincial education departments to make more targeted and sustainable investments in education and school infrastructure. This would reduce the mandated burden on the companies while ensuring better resource allocation and efficiency, which would provide better long-term outcomes.
Tshepo Mokholo
Tshepo Mokholo is an urban practitioner, designer, writer, and researcher based in South Africa. He has worked on design and research projects across the continents, including Kenya and Rwanda. He holds an Honours degree in Architecture from the University of Pretoria and is currently a Master’s student in Southern Urbanism at the African Centre for Cities, where his research is exploring alternative development models, using an analysis of township food systems as an entry point.
