There was an uptick of left-wing political rhetoric concerning the South African mining sector during November 2009, with the African National Congress (ANC)’s youth wing president, Julius Malema, once more calling for the nationalisation of South Africa’s mining assets. However, other ANC officials have dismissed Malema’s comments and it seems highly unlikely that the government would make such a move, given the importance of the sector to the wider economy.
In another key development for the South African mining sector, December 2009 saw diamond miner De Beers announce a rights issue to raise up to US$1bn, as it seeks to refinance some US$1.5bn in debt due in 2010. The company’s total debt pile stands at some US$4bn, according to media reports. De Beers has said that all three major shareholders (Anglo American, the Oppenheimer family and the Botswanan government) have approved the rights issue.
New Data
For 2010, the report has made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also draw on the expertise of the UN’s Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasting; experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not.
Country Overview
Accounting for a third of South Africa’s total exports, mining remains a vital industry for the country’s economy. South Africa hosts the world’s largest deposits of gold and about 80% of global platinum reserves. It is also a significant producer of diamonds. The country’s mining industry has matured and the pace of mineral exploration has fallen over the years – even more so in recent months as firms reduced capital expenditure (capex) and scaled back projects.
Industry Forecast
South Africa has the largest mining endowment in Africa, and the onus of spearheading the continent’s mining activity falls on the South African industry, both in terms of economic growth as well as setting standards for mining regulations
The report forecasts that South Africa’s mining sector will reach a value of US$37.38bn by 2014. In the nearterm, growth should bounce back from the depressed levels of 2009, as the country is likely to be among the first to benefit when the global economy returns to strength. However, the fact that South Africa is a mature market may limit its scope for future mining sector growth in the decade ahead. Meanwhile, reserves are depleting, while power shortages and labour unrest continue to disrupt mines. That said, mining remains a key economic sector for South Africa, contributing some 8% to GDP. What the long-term future holds for the South African mining industry depends a lot on the result of exploration activities and any future changes made to mining regulations by the government.
Related posts:
- South Africa wants 26 percent or more Stake in Mining Companies for HDSAs by 2014
- Key Industry Players Gather in South Africa for Mining Indaba
- New Report Covers Diamond Mining in Southern Africa
- Fatality at Petra Diamonds’ Koffiefontein Diamond Mine in South Africa
- New Angola Mining Q3 2010 Market Report Indicates Diversification from Diamonds
