AMN - United approach needed in South Africa – comment by Yolanda Torrisi

Although mining production in South Africa increased in June, saving the country’s economy from potential recession, there are further difficulties ahead which the industry must fight hard to overcome.

Data from Statistics South Africa shows that mining output increased 2.8 per cent year-on-year in June 2018, well above market expectations of a 0.5 per cent gain. This performance followed a 1.8 per cent fall in the previous month.

Mining output increased just 0.8 per cent quarter-on-quarter in the June quarter, narrowly staving off fears that South Africa's economy could sink into recession. This followed a 2.2 per cent contraction in the March quarter after manufacturing failed to inspire.

Despite this narrow escape, the industry remains in a critical state with declining gold prices, increasing electricity costs and potentially escalating US/China trade tensions with South Africa's situation worsened by the likelihood of further job cuts, labour unrest and ore bodies that are deeper and increasingly difficult to mine profitably. Adding to the uncertainty is the upcoming revised Mining Charter.

The Minerals Council South Africa is developing strategies to help the industry through the difficult times, which makes next week's African Mining Network dinner function featuring the council's senior executive, public affairs and transformation, Tebello Chabana, a must-attend event.

The topic of his address is: The profound and radical change that the South Africa Minerals Council is working towards, it’s vision and strategy.

Adopting technology and optimising operations will also play important roles in mining in the future, which makes the address of Pan African Minerals CEO Nkululeko Mhlaba very relevant. The topic is: Building a thriving mineral beneficiation industry.

The country's once strong gold sector continues to struggle and it plunged 19.2 per cent on a yearly basis in June, following an equally significant fall of 14.1 per cent in May.

In the March quarter, overall mining production contracted 9.9 per cent, extending a 4.4 per cent drop in the previous quarter. This was mainly due to lower production of gold, platinum group metals and iron ore.

However, platinum rebounded in the second quarter, extending its monthly gains in June to 28.2 per cent from 10.1 per cent in May.

Also on a positive note, depreciation of the rand exchange rate could provide some support for the sector in the September quarter.

In recognising that due process must be followed in relation to job cuts, the Minerals Council spokesperson Charmane Russell said: “There is a very clear process of consultation in place under the Labour Relations Act that includes an independent facilitation by the Commission for Conciliation, Mediation and Arbitration (CCMA).

“We must work together in a constructive way to find real and workable solutions. Any ‘backlash’ will only serve to imperil more jobs,” she said.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com