Mining
From The Report: South Africa 2013
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The mining industry in South Africa is the fifth largest in the world, and today it accounts for more than 5% of the nation’s GDP. Moreover, the sector remains one of the country’s most important sources of employment, providing 16.2% – or nearly 1.4m – of the total formal non-agricultural jobs. The labour unrest that was seen in 2012 highlighted some of the challenges faced by the sector as it adapts to subdued global markets, ageing mines and overburdened infrastructure. While these challenges are considerable, the nation’s resource base and the rising demand from some of the world’s more buoyant markets offer some promise to the sector. The value of the nation’s non-energy mineral wealth – estimated by Citibank at $2.5trn in 2010 – underwrites the future development of this vital sector.
This chapter contains interviews with Simon Scott, Acting CEO, Lonmin; and Sipho Nkosi, Chief Executive, Exxaro Resources.

Articles from this Chapter

Overview

Far reaching: Preparing for a prosperous future as demand for commodities rises
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The mining industry in South Africa is the fifth largest in the world, and today it accounts for around 5% of the nation’s GDP. The sector remains one of the country’s most important sources of employment, providing 16.2% – or nearly 1.4m – of the total formal non-agricultural jobs, according to a recent study by Quantec, an economic and financial consultancy, and the Industrial Development Corporation. Given South Africa’s relatively high dependency ratio of 10:1, this suggests that around…

Analysis

On the table: With questions regarding ownership set to the side for now, the focus has turned to taxation
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In December 2012 the governing African National Congress (ANC) finally settled the issue of nationalisation of mines that had spread alarm through the sector for much of the year. “The issue of nationalisation as we have discussed during the past few months is off the table. The ANC affirms its historical position on this topic – strategic ownership where deemed necessary,” Malusi Gigaba, the minister of public enterprises, told the press at its five-year convention – uncompromising phrasing…

Analysis

Overcoming challenges: Addressing labour issues is a matter of importance for mine operators and the state
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The issue of labour has emerged as one of the most salient challenges faced by South Africa’s mining sector. In early 2012 wildcat strikes in Impala Platinum’s Rustenburg plant, the world’s largest platinum mine, ended in rioting and a six-week production stoppage that cost the company 3000 oz per day. By August unrest had spread to Lonmin’s nearby platinum facility in Marikana, where rock drillers downed tools in another strike and demanded a 300% rise in their monthly salaries. Within a…

Interview

OBG talks to Simon Scott, Acting CEO, Lonmin
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Interview:Simon Scott What avenues are there for mines to improve worker conditions and morale? SIMON SCOTT: Migrant labour is a reality for most of South Africa’s mines, stemming from the days of apartheid when workers were forced to live a long distance from the mines. This legacy still remains, and much of the labour force tends not to originate from, nor consider their primary dwellings, as being in and around the location of the mine. In turn, the community near the mine tends to…

Interview

OBG talks to Sipho Nkosi, Chief Executive, Exxaro Resources
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Interview:Sipho Nkosi How would you rate South Africa’s competitiveness as a global coal producer? SIPHO NKOSI: South Africa, through early investments in rail lines and power stations to create domestic demand and scale, was able to bring its costs of production down and grow its exports. However, today the dynamics have changed, because rail and power capacity saw little investment during the global commodities boom. Most of the more easily extracted coal is being depleted, and new coal…

Analysis

A vital resource: Coal is essential to national electricity generation
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The low cost and relative abundance of South Africa’s coal has assured it a central place in the nation’s economic life; according to the Chamber of Mines of South Africa, in 2012 94% of domestic electricity generation was derived from coal-fired thermal power stations, which consume about 130m tonnes of the 250m tonnes produced annually in South Africa. Coal also is a useful earner of foreign exchange: after gold and the platinum group of metals, the nation’s coal exports are the third largest…