Modern Mining October 2021

to make changes to their boardrooms. “While the transition might present challenges, it also presents substantial opportunities for mining companies to create shared value and economic ben- efits for the communities in which they operate,” Mokone says. Infrastructure PwC believes that there is an obvious need to invest in the right skills, infrastruc- ture, energy, and water and, in general, creating an enabling environment for exploration, mine development and production.

Realising the full potential benefit of the country’s resources and creating long- term sustainable outcomes will depend on the industry’s ability to mine cost competitively and to integrate various value chains profitably. Share of value added The 2020 – 2021 year has been rewarding for min- ing industry stakeholders. There have been record distributions to shareholders. As reported in com- pany value added statements, employees continue to take a major share of value added (20%) and gov- ernment increasing its share through direct taxes (14%), employee taxes (3%) as well as royalties (5%). What was evident this year is that growing the pie is a much more successful way to share value with stakeholders than trying to increase stakeholder share from a shrinking pie. Mining companies for the first time in a num- ber of years were able to retain value created. This strong financial position and available cash resources leaves mining companies with interesting capital allocation decisions. Strategies will include

expansions and new development, acquisitions, strengthening of local infrastructure and host com- munities, market development and investments up and down the value chain. Execution on these strat- egies will require disciplined long-term sustainable mind sets. 

The current period saw production increase by 6% YoY. Photo by Zac Edmonds on Unsplash

Key takeaways  Total market capitalisation increased in the current year to R1,470-billion from R1,047-billion last year  This represents a R423-million (408%) year-on-year (YoY) increase from 2020, mainly attributable to the increase in market capitalisation of com- panies within the PGMs sectors  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  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 performance exceeded expectations on most fronts

October 2021  MODERN MINING  35