The value of SA’s mining production exceeds R1 trillion
In 2021, for the first time ever, the value of production in the mining industry exceeded one trillion Rand, the Minerals Council of South Africa said on Monday, at the very beginning of the Mining Indaba in Cape Town.
According to the Council’s 2021 Facts and Figures book, SA’s mining production hit record highs last year, coming in at just under Rs 1.2 trillion, an improvement from the Rs 910 billion recorded in 2020.
It says the value of mining production has received a boost from stronger commodity prices, which have not only helped the sector contribute to the country’s economic recovery, but also helped increase employment as the country continues to fight a unemployment crisis.
The Council’s latest research report finds that the 2021 commodity boom, which saw commodity prices higher than 40% year-on-year in dollar terms and 20% in rand terms, saw the he mining industry increase its direct contributions to gross domestic product (GDP) by 36% to R482 billion, up from R353 billion recorded in 2020.
“The importance of mining to the South African economy cannot be underestimated,” says Roger Baxter, CEO of the Minerals Council.
“The Facts and Figures publication shows how fundamental mining is for the country, the economy in general, the fiscus and the labor market,” he adds.
More jobs and tax revenues
The report says the industry added over 6,000 additional jobs to the economy in 2021, employing 458,954 people during the year, contributing Rand 154 billion to employee pay and Rand 27 billion to pay-as-you. -earn (PAYE) on behalf of its employees.
“The industry has 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 due to Covid, and adding more jobs to the economics, “comments Baxter.
Also benefiting from rising commodity prices was South African Revenue Services (Sars), which received a much-needed tax hike from mining revenues.
During the period, the industry paid R78 billion in income taxes, double what it paid in 2020, the mining sector also paid R15.4 billion in value added taxes (VAT).
Mining safety slide
While it’s been a booming financial year for mining companies, the industry’s safety performance has taken a hit. According to the board, 2021 marked the industry’s second consecutive year of regression in terms of safety performance.
In 2021, 74 workers in the industry died from mining accidents, while 60 employees died in 2020.
According to the council, the industry is putting mechanisms in place to address this worrying trend. He notes that the first indications for 2022 are showing positive signs of improvement.
Sadly, the country’s largest gold producer, Harmony Gold, reported Monday that four of its workers died in a maintenance-related accident at its Kusasalethu mine in Gauteng on Saturday (May 7).
The news added a summer note to the start of Indaba Mining.
“We are deeply saddened by this incident. At Harmony, we see our employees as part of a larger family. Our priority now is to support the families of the deceased and all those affected by this tragedy, ”said Peter Steenkamp, CEO of Harmony Gold.
In its media statement released to coincide with the start of this year’s Indaba Mining, the Minerals Council also touched upon additional challenges the industry faces, such as SA’s shoddy rail and port operations. This problem has resulted in the mining industry’s “opportunity costs” rising to R50 billion in 2021, according to the council.
“While the mining companies have had extremely positive financial results, there are underlying challenges that require our full attention.”
“We are working closely with Transnet to address the constraints that prevent SA Inc from taking full advantage of high commodity prices and strong demand for our minerals,” says Baxter.
The council also noted with concern the rapid rise in input costs in relation to commodity prices, which he believes was largely driven by rising electricity and fuel prices.
“Although production has recovered 11% from its low base in 2020, the 20-year mining production index shows that the sector’s production has not recovered from the peak of 2000/2006 and is struggling to maintain the levels of 2015” .
This article originally appeared on Moneyweb and has been republished with permission. Read the original article here.