CoM sees resurgence in hope, green shoots in South African mining industry

CAPE TOWN (miningweekly.com) – There is a new sense of hope in the mining industry and in South Africa, says Chamber of Mines (CoM) CEO Roger Baxter.

“It gives us a new confidence that a resurgence is taking place in the industry for the year ahead,” said Baxter, who spoke at a media briefing at the Investing in African Mining Indaba, on Monday.

Baxter enthused that, “for the first time in a number of years . . . [this year] it is possible to look forward to reasonable hope, rather than foreboding [, as there are] definitely . . . some real positive green shoots.

“There [are] some positive winds of change blowing through the country and through the industry,” he enthused.

Baxter added that the initial signals from the leadership of the ruling party allowed the CoM to be cautiously optimistic; however, he stressed that this has to be followed by real action, as well as real resolutions for some matters, including the Mining Charter.

He further acknowledged that, while there are complex political dynamics at play, the CoM is keen to work with government and other stakeholders in getting the potential of this great industry back on track, which means “new government, leadership and rapid improvement of governance, and a focus on real issues holding the industry back”.

Baxter further underscored some key highlights of the mining industry for 2017. Based on the latest statistics available, the mining industry contributed 6.8% to the country’s gross domestic product (GDP), compared with 7% in 2016.

In real terms, the industry was estimated to have expanded by 3.7% in 2017, contributing R312-billion to GDP, Baxter highlighted, adding that this was partially due to an increase in production.

The industry contributed R93-billion to fixed investment, while employment was estimated to have increased by 1.6% to 464 000 during 2017, which could be partially attributed to the growth in the industry.

INVESTMENT WHAT IF
Baxter, meanwhile, cited the results of the chamber’s survey to assess members’ potential investment strategies should the South African mining sector return to the top 25% in investment attractiveness rankings.

The survey found that capital expenditure (capex) in a more conducive and certain environment could expand by an additional outlay of more than R122-billion.

“This means that capex on mining projects could be 84% higher than the current R145-billion spent in the mining sector (and currently stretching over the next four years),” he said.

Further, the impact on employment creation, according to the survey results, would be nearly 48 000 people.

“We know the future holds challenges, but we are ready to stand and play our role in leading the industry, and engage with other stakeholders leading the industry, in getting the outcomes necessary to get this great industry back on track,” Baxter said.