This report provides an overview of trends in the mining sector and includes information on major trends in production, commodity prices, exports, employment and labour costs, safety, illegal mining, regulations and competition. The report covers industry trends at macro level. More information on the underlying industries in the sector, as well as its players, are contained in separate reports published by Who Owns Whom.
South African Mining Industry Trends
The mining sector provides materials essential for all sectors of the economy and creates employment, investment, government revenues and infrastructure. The sector reached a remarkable milestone in 2021 when output exceeded R1tn for the first time. The growth of the sector came on the back of record commodity prices globally, driven by demand and supply uncertainties. The pandemic and the more recent invasion of Ukraine by Russia are playing an important role in supporting high commodity prices. Input costs and rail and port logistics constraints are preventing the country from maximising its export earnings potential during a commodity boom.
Reasons for the recent decline include the gold industry experiencing one of its most protracted strikes into May 2022, platinum mines rebuilding furnaces and having operational difficulties, coal mines being affected by higher-than-expected rainfall and electricity cuts. Industry players are hopeful that the situation can be turned around, depending on commodity demand and prices holding up, the creation of a conducive policy environment and the elimination of physical infrastructure constraints.
The invasion by Russia of the Ukraine at the end of February 2022, has had unprecedented impacts on energy and industrial commodities markets. The price of energy commodities and precious metals, which started to soften towards the end of 2021, increased to near-historic highs by March 2022. Volatility in commodity prices hold risk for the economy and the mining sector. Previously-mothballed production capacity elsewhere in the world can be brought back, while higher petroleum prices fuel inflation.
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Table of Contents[ Close ]
|2.||DESCRIPTION OF THE INDUSTRY||1|
|2.2.||Size of the Industry||3|
|2.3.||Key Success Factors and Pain Points||4|
|3.1.||State of the Industry||8|
|4.2.||The Russia-Ukraine War||34|
|4.5.||Safety at Mines||41|
|5.2.||Barriers to Entry||48|
|Appendix 1 – South Africa’s Contribution to World Mineral Reserves, 2021||53|