MINING SECTOR
GOING FOR GOLD BY ELSKE JOUBERT The mining industr y in South Africa remains a vital component of the countr y’s economy. The sector contributes approximately R8 for ever y R100 produced by the national economy and employs 2.5% of the national workforce. Mining remains the largest industr y in Nor th West, Limpopo, Mpumalanga and Nor thern Cape.
2018: A MIXED BAG OF PERFORMANCE The 2018 financial year was a challenging year for the mining industry in South Africa; however, commodities like iron ore, coal, manganese and chrome performed well. Says Michal Kotzé, PwC Africa Energy Utilities & Resources Leader: “2018 can be described as a mixed bag of performance for South Africa’s mining industry, with bulk commodity prices continuing to rise during 2018 from the lows at the beginning of 2016, while precious metals continued to struggle. Together with the gold and platinum impairments, it meant that the industry recorded a loss for 2018.”
SA’S LATEST MINING CHARTER South Africa’s latest Mining Charter is aimed at sharing the benefits of the country’s mineral wealth more equally among its citizens. However, according to AngloGold Ashanti Chairman Sipho Pityana, the Charter doesn’t provide solutions to the industry’s challenges and will make it difficult for companies to buy and sell assets. “South Africa risks driving away new investment and crippling its mining sector if ‘reckless’ new rules are implemented. When the industry says to you that what you are proposing will kill the industry, you should sit up and listen,” Pityana said in an interview at Bloomberg’s Johannesburg office. “Layers and layers of these things make mining an uninvestable proposition and you are talking about an industry that basically has its back up against the wall.”
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Top Performing 17 th Edition
Negative perceptions about the new mining regulations could have ripple effects through the entire South African economy. “If you have gold miners desperately looking for investors and you say, ‘by the way, you also have to contend with this,’ I don’t think you are going to have a long queue of suitors,” Pityana said. “Consensus is not just about protecting the mining industry, but it’s also about protecting the image of the country that we don’t do things in a reckless way.”
2019 INVESTING IN AFRICAN MINING INDABA
President Cyril Ramaphosa, the first South African president to speak at the Indaba, relayed the importance of the mining industry as a key player in our economy. This year’s Indaba focused on, among other themes, resource nationalism, innovations in technology, battery metals, and diversity in mining and sustainable development. “We have prioritised the restoration of a policy and regulatory environment that is stable and predictable. Significant work has been done to remove the uncertainty that held back the development of the industry. “We have emerged from a period of strained relations where the courts became the main platform of engagement between the industry and government. We recognise the critically important role that mining can and must still play in shaping the future of our country,” Ramaphosa said.
