Ernst & Young’s Africa head, Wickus Botha, has advised South Africa to take the pressure off  its ailing gold and platinum mining sectors by investing in minerals used in industrialisation to grow its infrastructural sector.

Botha said the Africa’s largest economy’s principal dependence on these two mineral sectors has placed extreme pressures on its performance; adding that the significance of precious metals in the global economy was far lower than that of other commodities, such as base metals, which supported construction and infrastructure development.

South Africa has two major iron-ore producers, one big copper miner, a limited number of manganese miners and a large number of thermal coal producers.

Botha noted that though “South Africa was once considered top of the list as a mining destination,” it has “perhaps lost a little bit of colour and flavour in the global mining industry.”

According to Botha, there has been a change in mining companies’ shareholder registers with the interest of investors demanding dividend yield. This move, he said, has cumulated a negative result as big mining houses now shift their focus to capital allocation to  protect their margins in order  to drive dividend payments.

Botha added that the change in investors who are largely focused on short-term gains, altered the way those companies perceive risk around capital allocation and access to capital, which is the top of the business risk list this year, rising from eighth place last year.

Ernst & Young’s latest annual “Business Risks Facing Mining and Metals 2013-14 report” released on Wednesday indicated that  margin protection and productivity improvements came in at number two on the list, up from fourth place.

It noted that in economies where one or two commodities dominated the market share, substitution was a credible threat, particularly when the commodity’s recent price had been high, or there was a regulatory push that effected its prolific use.

Botha however said with big mining companies scaling back on new mining projects and the willingness to sell assets to address the top two risks they are facing this year; the country should take advantage of these decisions by snapping up skilled mineral resources people cut adrift globally.

He added that the current economic slowdown provided a good opportunity to expand South Africa’s basket of commodities.

“We should invest now for when the appetite returns for new investment, we are better positioned than we are currently. We didn’t respond too well to the commodity super cycle,” Botha  said.

“There’s a great opportunity to change that and influence that, to make South Africa competitive and attractive again. We need to sort out policy stability and make sure we deal with the availability of skills and infrastructure.”

“One of the things that we are underexposed to in our basket of commodities is the production of base metals; the stuff that builds cities and produces steel, such as cooking coal, iron-ore, aluminium, copper and zinc,” Botha said.

“We have a great opportunity to sort out our basket of commodities and, as a country and as an industry, we need to really think how we relieve the pressure we are putting on two industries that are not really the driving force behind building cities or factories.”