The world-class South African mining sector is a cornerstone of the economy. South Africa is the world’s biggest producer of gold and platinum and one of the leading producers of base metals and coal. Mineral commodities are exported to 80 countries. South Africa is a treasure trove with mineral deposits only matched by some countries of the former Soviet Union.
The industry makes a significant contribution to economic activity, the development of sustainable job opportunities and foreign exchange earnings. Major companies are increasingly moving their primary listings to New York and London as part of globalisation which takes many forms, from the direct acquisition of mining companies to partnerships with smaller exploration companies. The mining industry is continually expanding and adapting to changing world conditions that influence demand for its products.
It has experienced great challenges and changes recently. The change strategies adopted by the industry over
the last five years have produced significant improvements in its competitiveness. With new leadership in place, better structured companies, a more robust operating and financial base, and some of the world’s most significant ore reserves, it will continue to be an important player in the global mining industry.
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STATE POLICY
South Africa is one of the few countries in the world that has a system of dual state and private ownership of mineral rights. The Department of Minerals and Energy is the primary government institution responsible for formulating and implementing
policy. It reports to and advises the Minister of Minerals and Energy, who, in consultation with the Cabinet, takes final responsibility for policy. Within the Department, the Energy Branch takes responsibility for energy affairs, and the Minerals Development Branch manages, among other things, mineral prospecting and mining rights.
The White Paper on Minerals and Mining Policy for South Africa was released in October 1998. The policy enables the effective and sustainable development of mineral resources to the benefit of all South Africans, at the same time containing the impact of prospecting and mining on the environment. The policy redresses past inequities, opens up new opportunities for local and foreign investors, and promotes South Africa’s global competitiveness. Although the Government intends to prevent the hoarding of mineral rights and the sterilisation of mineral resources, security of tenure will be guaranteed.
The Government’s long-term objective is for
all mineral rights to vest in the State, but, as a transitional measure, a new system for granting access to mineral rights will apply. The ‘use it and keep it’ principle will be introduced to discourage unproductive holding of rights and ensure tenure retention where exploitation might not be economical or might disrupt markets.
Click here for the Department of Minerals and Energy site
ECONOMIC CONTRIBUTION
During 1998, the mining industry directly contributed 6,6% to the gross domestic product (GDP) and an estimated 14% through associated multiplier effects. There has, however, been a declining trend in the contribution to the GDP over the last decade, owing largely to the contraction in the gold-mining industry.
Mining contributed more than 9% to the gross domestic investment during 1998, while sales of primary mineral products accounted for 34,3% of total export revenue. The inclusion of various processed mineral
products such as ferro-alloys, aluminium, carbon and stainless steel increased this contribution to more than 50%. The ferrous minerals sector has been the leading performer in the primary minerals industry over the last 13 years, with revenue in dollar terms growing at 4% annually. Demand depends on the fortunes of the world steel and stainless steel industries.
COMPANIES
South Africa’s mining companies dominate many global sectors of this key industry. South Africa provides 40% of the world total for aluminium-silicates, chrome, ore, vanadium and verniculite and 20% for gold. It is the foremost world supplier for many other minerals.
Corporate restructuring continues at a fast pace. Over the last two years, South African mining houses transformed into large focused mining companies that include Amplats, Anglogold, De Beers, Implats and Iscor. Anglo American moved its primary listing from Johannesburg to London in 1999 while Harmony acquired Kal Gold and
Randfontein to make it one of the biggest gold mines in the world.
Click here for a full list of Chamber of Mines member companies
Click here for independent news on this sector
In 1999, some 691 mines and quarries employed about 410 000 people, many from neighbouring countries, representing about 3% of the economically active population. Taking into account the multiplier effect of the supply and consumer industries, including dependants, many millions rely on the mining industry for their livelihood. More than R19,6 million was paid out in wages.
Visit the De Beers
Consolidated Mines site
Visit the Anglo Platinum site
Visit the Impala Platinum site
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