Modern Mining September 2019

COMMENT

South African mining in facts and figures

T he Minerals Council South Africa has released the latest edition of its Facts and Figures book- let. As always, it’s a fascinating combination of commentary and statistics which together give a real sense of exactly where the South African mining industry is in terms of production, revenues, exports, levels of employment and safety. No need to guess – it’s all in ‘Facts and Figures 2018’ . On the whole, the picture that emerges is of an industry which is neither growing nor declining sub- stantially, with some figures up and some down, but few of them dramatically so. For example, in 2018 mining contributed R350,8 billion (or 7,3 %) to GDP compared to R343,6 billion (or 7,5 %) in 2017, a slight drop in percentage terms. On the other hand, the industry’s direct contribution to fixed investment in 2018 was R91,1 billion, compared to R77,1 billion in 2017, while total primary mineral sales amounted to R498,7 billion, as opposed to R474 billion in 2017. Company taxes paid in 2018 totalled R22 billion, a R3 billion increase on 2017. Mineral export sales in 2018 totalled R333,2 bil- lion, the equivalent figure for 2017 being R328 billion. The Minerals Council points out that export earn- ings from minerals are approximately equal to half of South Africa’s foreign reserves and account for 26,7 % of the country’s total export book. The figures for employment are disappointing, with the mining industry employing 456 438 people in 2018, a decline of 1,6 % from the prior year. The most significant job losses were experienced in the gold sector (-11,2 %), the diamond sector (-9,2 %) and the PGM sector (-3,38 %). Balancing these losses, the manganese, chrome ore and coal sectors all added jobs in 2018, with the percentage increase in manga- nese being a healthy 20,2 %. The safety performance of the mining industry in 2018 in terms of fatalities was somewhat improved, with 10 % fewer fatalities being recorded. The PGM sector had 12 fatalities (29 in 2017) while the coal sector saw a slight improvement with nine fatalities compared to 10 in the prior year. Gold remained unchanged, with 40 fatalities in 2018, the same fig- ure as 2017. Total fatalities were 81 in 2018 compared to 90 in 2017. While everyone would agree that even a single fatality is one too many, there’s no question that the mining industry’s safety record has improved dramati- cally over the long term. In fact, over a 25-year period

the number of fatalities has decreased by 87 %. Looking at the industry on a sectoral basis, coal sales totalled approximately R146 billion in 2018 (roughly R15 billion more than the figure for 2017) although production was little changed at 253,26 Mt compared to 252,27 Mt in 2017. Employment totalled 89 647 people, representing about 19 % of employ- ment in the mining sector. Total nominal sales in the PGM sector amounted to R104 billion in 2018, up from the R97 billion of 2017 but, as with coal, total production remained relatively stable (4,32 Moz of platinum in 2018 versus 4,29 Moz in 2017). The sector employed 167 041 people in 2018. This represents a substantial decline from the 197 752 people employed in 2012, the peak over the past 10 years. Turning to the third pillar of South Africa’s min- ing industry, gold, production in the sector continued its inexorable decline, with 117 tonnes of gold being produced (a paltry 3,3 % of global production), 20 tonnes less than in 2017. Total sales amounted to R70 billion, well down on the roughly R83 billion of 2017. The total number of direct employees was just a touch over 100 000. As the Minerals Council points out, while the total number of people employed in the sector has been on the decline since 2007, total employee earnings have soared from R15,9 billion in 2008 to R27,6 billion in 2018. Space doesn’t allow me to go through all the other mining sectors in any detail but, briefly, production of iron ore at 74 Mt in 2018 was fraction- ally down on the 2017 figure while manganese at 14,9 Mt was slightly up. Similarly, chrome ore pro- duction was relatively stable, with 17,85 Mt being produced in 2018, just over 1 Mt up on 2017. As for diamonds, production in carats totalled 9,9 million in 2018 (about 10 % of global production) compared to 9,7 million in 2017. How to sum up Facts and Figures 2018 ? Well certainly the increase in investment by mining com- panies is a very welcome development. But, as Roger Baxter, CEO of the Minerals Council, argues in his introduction to the booklet, it will need to be sustained over the long-term if mining in South Africa is to grow and have a long-term future. Whether that’s going to happen remains to be seen. There are encouraging signs but we’re certainly not out of

On the whole, the picture that emerges is of an industry which is neither growing nor declining substantially,

with some figures up and some down, but few of them dramatically so.

the woods yet. Arthur Tassell

Editor Arthur Tassell e-mail: mining@crown.co.za Advertising Manager Bennie Venter e-mail: benniev@crown.co.za Design & Layout Darryl James Circulation Brenda Grossmann

Publisher Karen Grant

Printed by: Shumani Mills Communications The views expressed in this publication are not necessarily those of the editor or the publisher.

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