The South African Mining Council's latest Facts & Figures 2022 notes that investment growth in new greenfield mining projects has lagged significantly over the past two decades, with South Africa's mining sector's contribution to the national economy more than halved, Mining Weekly** reported.
Net fixed capital formation figures show that the mining sector is faltering along a greenfield road with no growth.
Investments in the mining sector are mainly used to sustain existing operations. This was reflected in a 30% higher total fixed capital formation investment, mainly focused on brownfield growth in existing leased areas.
By comparison, from 1993 to 2022, net investment in fixed capital formation in the mining sector averaged just 4%. (See attached photo).
Net investment in fixed assets needs to grow substantially, as deposits that have already been mined need to be replaced by newly discovered resources.
In stark contrast to other sectors of the South African economy, the mining industry has been struggling to achieve and maintain positive growth.
In fact, since 1994, the mining sector is the only South African economy with an average growth rate of minus 04% of the divisions, while all other divisions saw growth.
in the area of an existing lease"Brownfield"Investment can only last so long, so new ones are necessary if the mining industry is to continue to be a meaningful factor of economic growth"Green spaces"Investment.
The value of mining output has remained at the level of trillions of rand for two consecutive years, which is enough to show the importance of mining.
While the mining sector's contribution to South Africa's gross domestic product (GDP) was R483.3 billion, an increase of 19%, with a total direct payment to the Treasury of R99.1 billion, but the mining sector's contribution to the Treasury could have increased by 35% to 50% in the event of improved logistics performance and power security.
In this way, ** can get the necessary cash flow to invest in much-needed socio-economic infrastructure, such as education, health, roads and railways, to drive economic development.
The output value as of December 2022 decreased by 69%。In addition, production performance in 2022 decreased by 67%。
In an interview with Mining Weekly, Mzila Mthenjane, the new chief executive of the Minerals Council, said: "Our industry is in recession and this trend should be of national concern. ”
Mthenjane added: "The Minerals Council is playing a leading role in reversing this trend, which is of great value to the country. ”
The Minerals Council is working closely with business peers,** and other stakeholders to ensure sustainable and pragmatic solutions to the infrastructure and logistics constraints facing the industry, while addressing the deteriorating safety environment.
If these barriers are addressed with the involvement of the private sector, the role of the mining industry as an important contributor to South Africa's economy and people's livelihoods will be fully unleashed. We believe in and will continue to uphold the vision of MiningMatters because it really matters. ”
It is imperative to establish a proven cadastral that operates efficiently as well as an incentive framework to ensure the promotion of mining exploration.
Compiled from: Mining Weekly