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Is there an opportunity to build back South Africa’s mining industry? The mining industry in South Africa may have shown resilience and weathered the Covid-19 hurricane, but businesses, particularly when it comes to environmental, social and governance (ESG) problems, still continue to concentrate on their strategies.
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his is according to a new study on the status of the mining sector in the world by PwC. The study portrays the industry in a favorable light, noting that mining companies stayed resilient and delivered on all fronts during an incredibly difficult year.
percent YOY in April as government legislation restricted industrial operation only to critical resources, with maximum capacity working only coal mines. As more mines were permitted to open, the fall in mineral production and sales eased to 27.6 percent YOY and 12.2 percent YOP under Lockdown Stage 4, respectively.
Stakeholders gained from increased profitability by strengthening their true social license to act in favor of their workers and the societies in which they reside with mining companies. The COVID-19 storm has been weathered by the mining industry, largely unscathed and definitely stronger than many other industries. Learn more regarding the role of COVID19 on the mining business.
In June, under Lockdown Level 3, the majority of mines were able to return to 100 percent output, while production and revenues were still down 28.2 percent YOY and 14.2 percent YOY, owing to technical restrictions and foreign market conditions, respectively.
It should be remembered that before the COVID-19 pandemic, the South African economy was still in a slump, with the country's GDP contraction for three consecutive quarters culminating in March 2020. At this time, the contribution of the mining sector to GDP decreased by three quarters year on year (YOY) in both of the recessions.
Amid a relatively gloomy forecast, as platinum basket prices rose and investors switched to gold as a safe haven security amid worries about the COVID-19
The second quarter of 2020 began with a 51.2 percent decrease in hard lockdown and mining output and revenue by 28.8 10 | SKILLINGS MINING REVIEW January 2021
pandemic and global trade conflicts, mining firms continued to enjoy increases in commodity prices, supported by a weakened rand. Some of the keys to the reports are: CAPITALISATION OF THE SECTOR
Total market capitalisation has risen from R840 billion to R1 280 billion in 2020. This sum is a YOY rise of R439 billion (52 percent) from 2019, primarily due to the increase in market capitalization of gold and PGM industry firms. Gold and PGM accounted for 80 per cent of the examined companies' market capitalisation this year and appear to lead the business. FINANCIAL PRODUCTION
For the year ended 30 June 2020, the overall revenue produced by the South African mining industry increased by 4% . It was largely powered by PGMs, gold and iron ore, which for the 12-month cycle witnessed sales rises. The largest portion of revenue was generated by PGM (28 percent), showing a 56 percent rise from
