Modern Mining October 2021

SA MINING SECTOR

Solid financial performance for South South Africa’s mining sector delivered a solid financial perfor- mance for the 2020 – 2021 financial years with value delivered to all stakeholders despite the current challenging pandemic envi- ronment. For the companies in PwC’s 13 th edition SA Mine analysis, revenue in rand terms grew by 63%. This was mainly driven by higher prices for PGMs and iron ore.

Andries Rossouw, PwC Africa Energy Utilities & Resources leader.

Marcia Mokone, partner in PwC’s Mining Division.

T he excellent financial performance resulted in mining companies being in a very strong financial position, with record distributions to shareholders and more than a tripling in taxes paid. Debt has largely been repaid and returns to shareholders reached record rand levels for many companies. These are some of the highlights from PwC’s 13 th edition SA Mine, a series of publications that highlights trends in the South African mining industry released today. “The growth in SA’s mining industry confirms the resilient nature of the sector and the opportunities that exist in rebuilding the South African economy. With record rand prices for gold, the platinum group metals basket, iron ore and more recently, coal, it was no surprise that the industry’s financial per- formance exceeded expectations on most fronts,” says Andries Rossouw, PwC Africa Energy Utilities & Resources leader. “The COVID-19 pandemic has also added momentum to the already in focus importance of the environmental, social and governance (ESG) agen- das across all industries in South Africa. Multiple stakeholders are increasingly challenging mining companies to make changes to their boardroom agendas on ESG. There is widespread recognition in the industry that for South Africa to achieve its net

zero targets, ESG must be a core component of any mining company’s strategy and policies.” Market capitalisation Total market capitalisation increased in the current year to R1,470-billion from R1,047-billion. This total is a R423-million (408%) year-on-year (YoY) increase from 2020, mainly attributable to the increase in market capitalisation of companies within the PGMs sectors. Financial performance For the companies in PwC’s analysis, revenue in rand terms grew by 63%. This was mainly driven by higher prices for PGMs and iron ore. The mining sector was one of the most resilient sectors, emerging strongly despite COVID-19 restric- tions to deliver record financial results. In line with the prior year, the PGM basket generated the largest portion of revenue. As global supply and demand jostled to find their way back to pre-pandemic levels, demand and therefore prices were the outright winner. With record rand prices for gold, the platinum group

32  MODERN MINING  October 2021