The South African mining industry remained under pressure in 2024 as lower non-gold commodity prices resulted in lower profitability among miners and caused some 12 000 job losses, Minerals Council economist Hugo Pienaar said.
Speaking at the Investing in African Mining Indaba conference in Cape Town on Monday, Peinaar said the sector was also impacted by logistic sector problems, and that the challenges in the sector were diluted to some extent by the positive impact from the absence of mining load curtailment by Eskom since end-March 2024.
This meant that from depressed levels in 2023 there was only a marginal improvement in real mining production during 2024.
He said there were low basket prices in platinum group metals and diamonds in particular, but this was not the same for every commodity, and for instance, high export volumes and basket prices for chrome saw 2 900 jobs added in that sector. Mining provided jobs to 471 882 people in the third quarter of 2024.
He said the coal sector also performed well last year, with exports through the Richards Bay Coal terminal reaching 52 million tons versus 48 million tons the previous year.
Iron ore exports also performed well, but there was a great deal of logistical infrastructure development and funding that would be required for the sector to reach a targeted 250 million tons by 2023,
Transnet had indicated that it would require at least R50 billion a year to upgrade its rail network to reach this goal, but it did not have these funds, so private sector partnership would be required to help meet this target, said Pienaar.
More than half the chrome exports were being shipped through the port of Maputo, and this had become an increasingly important port for the chrome sector in the past two years, said Pienaar.
Mzila Mthenjane, the CEO of the Minerals Council, said the Minerals Council had provided input into the changes being brought by the Mineral and Petroleum Resources Development Act (MRDA), and although the Council had not seen the changes envisaged by the Department of Mineral Resources and Energy (DMRE), it was hoped these would be market friendly.
Mthenjane said the DMRE had indicated that the new, but long awaited, online mining cadastre system, which would replace the current manual system of obtaining mining rights in South Africa, would be ready by the middle of this year.
The system was currently being tested in the Northern Cape. The current manual cadastre system has an estimated backlog of between 2500-3000 mining applications, the majority of which were likely to be rejected.
“With the industry remaining under pressure and the MPRDA review on the horizon, we need to guard against adopting any policy measures that could harm the primary mining industry and deter much-needed investment in exploration and development of new mines, Mthenjane said.
“It is an absolute imperative to have a conducive operating environment that reduces the cost of mining to encourage more mineral exploration, enhances primary mining extraction and stimulates beneficiation when appropriate on commercial grounds,” said Pienaar.
Mining contributed 6% to South Africa’s gross domestic product in the first three quarters of 2024. This was down from 6.3% in 2023. Exported goods worth about R800 billion, contributed 45% to the value of overall South African merchandise (goods) exports.
BUSINESS REPORT