Mining
From The Report: South Africa 2014
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South Africa’s mining industry is the fifth largest in the world and the country has around 80% of global platinum reserves, 11% of gold reserves, and some of the largest supplies of chrome ore and manganese. The sector’s contribution to GDP has, however, been on a steady decline, falling to just under 5% in 2013 from 11% two decades earlier. Reversing this trend is a top government priority, considering mining’s importance to employment and foreign exchange earnings. Although domestic output is showing signs of a cyclical contraction, with reserves estimated to be worth $2.5trn, there remains plenty of wealth underground to still be reached. Much of this is being unlocked via advanced extraction technologies but is still awaiting new and upgraded transportation and power infrastructure to come on-stream. South Africa should retain its position as a global mining powerhouse, as few can match its sheer size and variety of reserves.

This chapter contains interview with Ngoako Ramatlhodi, Minister of Mineral Resources; and Neal Froneman, CEO, Sibanye Gold.

Articles from this Chapter

Overview

A focus on government policy during a time of slow demand
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South Africa’s mining industry is the fifth largest in the world and the country has around 80% of global platinum reserves, 11% of gold reserves, and some of the largest supplies of chrome ore and manganese. The sector’s contribution to GDP has, however, been on a steady decline, falling to just under 5% in 2013 from 11% two decades earlier. Reversing this trend is a top government priority, considering mining’s importance to employment and foreign exchange earnings. In a period of subdued…

Analysis

Targets for transformation: Reassessing the sector’s future as the 2004 Mining Charter expires
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For over a century, up until the fall of apartheid, the entirety of South Africa’s mining sector was controlled by a small selection of diversified conglomerates, each governed by a group financing model. New, foreign or specialised participation in the sector was a rarity, as the incumbent mining finance houses held titles and rights over unexploited assets. When a freely elected African National Congress government took over in 1994, industry restructuring and unbundling became a top priority,…

Interview

OBG talks to Ngoako Ramatlhodi, Minister of Mineral Resources
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Interview:Ngoako Ramatlhodi How can local beneficiation of minerals be increased in a cost-effective and sustainable manner? NGOAKO RAMATLHODI: The best way to drive beneficiation is to ensure collaboration with all stakeholders throughout the minerals and mining value chain. On a local and regional level, we need to coordinate demand for products that are traditionally imported from other parts of the world after we export the input commodities. As the Department of Mineral Resources we…

Interview

OBG talks to Neal Froneman, CEO, Sibanye Gold
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Interview:Neal Froneman What factors are currently driving local and international demand for gold? NEAL FRONEMAN: Supply and demand dynamics do not quite have a linear relationship with the price of gold. Gold is a tangible, financial asset that is considered a safe haven in many respects. As such, when the large economies of the world do well, the gold price generally goes down. When the US dollar or euro is strong, it normally finds its way in to the gold price. Right now we are seeing…

Analysis

Impact of new bill on mineral and petroleum resources remains unclear
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It seems that every year in South Africa, newspaper headlines are filled with a pending shift in policy direction for the mining sector, but rarely with any results. In 2012 fears were of a populist-driven move towards resource nationalisation, which was subsequently quashed by President Jacob Zuma’s administration, while 2013 saw concerns over a new resources tax. In March 2014 an amendment bill to the Mineral and Petroleum Resources Development Act (MPRDA) made its way through parliament with…

Analysis

The sector negotiates the productivity conundrum of ensuring both profitability and living wages
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Industrial action has become an annual event for a number of South African sectors, leading to what is referred to as “strike season” during the second and third quarters of the year. In the mining sector, particularly in the platinum industry, the last couple of years have seen an escalation in terms of the size and scope of labour unrest, which could have significant ramifications for future investment. On January 23, 2014, 70,000 platinum workers at Lonmin, Anglo American Platinum (Amplats)…