Worth of SA mining manufacturing breaks via R1 trillion mark

In 2021, for the primary time ever, the worth of manufacturing within the mining business topped the R1 trillion mark, the Minerals Council of South Africa stated on Monday, simply because the Mining Indaba in Cape Town kicked off.

According to the council’s 2021 Facts and Figures e-book, SA’s mineral manufacturing achieved file values final yr, coming in slightly underneath R1.2 trillion – an enchancment from the R910 billion reported in 2020.

It says the worth of mining manufacturing obtained a lift from stronger commodity costs, which not solely aided the business’s contribution to the nation’s financial restoration but additionally helped improve employment because the nation continues to battle an unemployment disaster.

The council’s newest analysis report notes that the 2021 commodity increase, which noticed commodity costs 40% larger year-on-year in greenback phrases and 20% larger in rand phrases, has seen the mining business improve its direct contributions to gross home product (GDP) by 36% to R482 billion, up from the R353 billion reported in 2020.

“The importance of mining for the South African economy cannot be understated,” says Roger Baxter, CEO of the Minerals Council.

“The Facts and Figures publication shows just how critical mining is for the country, the broader economy, the fiscus, and the labour market,” he provides.

More jobs and tax revenues

The report says that the sector added over 6,000 extra jobs to the financial system in 2021, using 458,954 individuals throughout the yr, contributing R154 billion to worker remuneration and R27 billion to pay-as-you-earn (PAYE) on behalf of its staff.

“The industry increased employment during 2021, a rare occurrence for a major economic sector in the prevailing climate, more than offsetting the jobs lost in 2020, mainly because of Covid, and adding additional jobs to the economy,” Baxter feedback.

Also benefiting from the rise in commodity costs was the South African Revenue Services (Sars) which obtained a much-needed tax increase from mining sector receipts.

During the interval, the business paid R78 billion in earnings taxes, double what it paid in 2020, the minerals sector additionally paid R15.4 billon in value-added taxes (Vat).

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Mining security slide

While it was a increase monetary yr for mining corporations, the business’s security efficiency took a knock. According to the council, 2021 marked the business’s second consecutive yr of regression in the case of its security efficiency.

In 2021, 74 staff within the business died because of mining accidents, whereas 60 staff had been killed in 2020.

According to the council, the business is placing mechanisms in place to deal with this worrying development. It notes that early indications for 2022 are exhibiting constructive indicators of enchancment.

Sadly the nation’s largest gold producer Harmony Gold on Monday reported that 4 of its staff died in a maintenance-related accident at its Kusasalethu mine in Gauteng on Saturday (May 7).

ALSO READ: Four Harmony Gold staff die after mud wall collapse

The information added a somber word to the beginning of the Mining Indaba.

“We are deeply saddened by this incident. At Harmony, we view our employees as part of the larger family. Our priority is now to support the families of the deceased, and everyone affected by this tragedy,” CEO of Harmony Gold, Peter Steenkamp, stated.

Industry challenges

In its media assertion launched to coincide with the beginning of this yr’s Mining Indaba, the Minerals Council additionally touched on additional challenges the business faces, resembling SA’s subpar rail and port operations. This difficulty resulted in a rise in mining business “opportunity costs” to as a lot as R50 billion in 2021, in keeping with the council.

“While mining companies did extremely well financially, there are underlying challenges which are demanding our full attention.”

“We are working closely with Transnet to address the constraints that are preventing SA Inc from fully benefiting from high commodity prices and strong demand for our minerals,” says Baxter.

The council additional famous with concern the speedy improve of enter prices in relation to that of commodity costs, which it says has been largely pushed by rising electrical energy and gas costs.

“Although production has recovered by 11% from the low base in 2020, the 20-year index of mining production shows that sector production has not recovered since the 2000/2006 peak and is struggling to maintain 2015 levels.”

This article initially appeared on Moneyweb and was republished with permission. Read the unique article right here.

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