OVERVIEW
Mining Record earnings for miners have been good for the national Treasury.
Credit: Pilanesberg Platinum Mines
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ommodity prices buoyed the South African mining sector in 2021. Rhodium palladium, platinum and gold collectively rose in price by more than 50% at one stage during 2021. Increased demand for platinum group metals PGMs has been a trend for some years, driven by the vital role played by PGMs in reducing pollution in the automotive sector. This was boosted more recently by applications for renewable energy and by supply constraints brought about by Covid-19 with production volumes down and shipping made more difficult throughout 2020 and into 2021. More than R23-billion in dividends was paid out to Kumba Iron Ore shareholders in July 2021. Interim earnings reached record highs on the back of a commodity price surge that followed the lifting of many pandemic restrictions around the globe. The company paid R9.2-billion in taxes and royalties in the six months to the end of June. With other mining companies recording similar figures, the government was able to keep paying social grants beyond the time when it thought it would have to scale down on support for people afflicted by the Covid lockdown and the slowing economy. Share prices seldom deal in irony, but when the coal company that was hived off from Anglo American in 2021 greatly improved its share price in just four months, some wry smiles might well have been exchanged by traders. Thungela Resources listed on the JSE in June and by early October its share price had increased fourfold to almost R100, giving the company a market value of R13-billion. There was irony in this result because Anglo American had gone to the trouble to promise to support Thungela financially until the end of 2022 if thermal coal prices did not hold up. With many companies getting out of coal and the global investor community under pressure to divest from fossil fuels, a new coal company seemed like a long shot. But the economic growth surge that followed the lifting of lockdown regulations caught energy planners by surprise. With not
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SECTOR INSIGHT Northam buys a stake in Royal Bafokeng Platinum. enough renewable energy yet on stream, the world started scrambling for energy sources. Cue Thungela Resources, the new owner of Anglo American’s thermal coal assets in South Africa. Other news in 2021 from Kumba Iron Ore was the appointment as CEO of Mpumi Zikalala, currently the managing director of De Beers Managed Operations, who became the first woman to head the company. In 2020, Amplats announced the appointment of Natascha Viljoen as CEO. An organisation called Women in Mining (WiMSA) aims to empower women in the South African industry, giving them a platform and a network. Current chairperson Petro Du Pisani is Head of Business Improvement Projects at Anglo American. A previous chairperson, Thabile Makgala, is the Executive: Eastern Limb at Implats.
