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Mining sector remains resilient in turbulent times

The South African mining sector has remained resilient amid the COVID-19 pandemic. This is the view of Minerals Council South Africa president Mxolisi Mgojo. He was speaking at a media briefing on the eve of the Investing in African Mining Indaba Virtual Event, on ‘The State of the Mining Nation’ and to launch the organisation’s Facts and Figures Pocketbook 2020.

Despite production disruptions as a result of an ongoing national lockdown, the mining sector is still a significant contributor to the country’s economy. Among the key economic drivers, the mining sector has:

  • Contributed R361.9 billion to GDP (2019: R376.4 billion)
  • Employed 451,427 people (2019: 460,015)
  • Paid employees R148.5 billion (2019: R143.5 billion) and contributed R26.2 billion (2019: R22.7 billion) to PAYE on behalf of employees
  • Paid R34.7 billion in value added taxes (2019: R36.9 billion) and R11.8 billion in royalties (2019: R8.6 billion)
  • Sold R608 billion in primary mineral sales (2019: R552.4 billion)
    Exported R414.5 billion in sales (2019: R361.7 billion)

Meanwhile, while the industry remains resilient, Mgojo called on the government to do more to attract investment into the sector and to promote exploration. In 2019, South Africa accounted for only 1% of global exploration expenditure and of this only 1 % is Greenfields exploration.

According to the Minerals Council, the lack of exploration investment is primarily down to a lack of transparency in the permitting system, delays in the issuing of permits, regulatory uncertainty and a lack of properly structured tax incentives for individuals/entities to invest into exploration in South Africa.

On a positive note, the COVID-19 pandemic has furthered modernisation in mining. According to Mgojo, companies are adopting a more people-centred 4IR approach. This means that the focus is not only on technology but on work culture, upskilling and reskilling.

Read: Counting the cost of the pandemic in South Africa

Focus on vaccinations and not vaccines

Meanwhile, Minerals Council CEO Roger Baxter highlighted that the industry has put in a massive effort to help stem the spread of COVID-19. As of 21 January 2021, 382,962 people had been screened and 104,084 tests carried out. The testing rate in the sector was 22.06%, higher than both the country’s (13.65%) and the global test rate (18.20%).

Regarding the vaccination rollout, Baxter stated that business has offered its support to government in distributing vaccines to mining employees and mining communities.

Working with government and labour, Baxter is confident that the mining industry can vaccinate 60 000 to 80 000 people per day, not only mine workers but also family members as well. According to Baxter, the aim is to get as many ‘jabs in arms’ with a target of vaccinating 3 million people in 60 days. The cost of the vaccination rollout to industry is about R300 million.

Meanwhile, reporting on the journey to Zero Harm, Baxter alluded to the fact that there has been a regression in the number of fatalities from 2019 which had 51 deaths. The official 2020 figures are expected to be released by the DMRE in due course.

Gerard Peter
Gerard Peter is a content creator and media strategist with more than 23 years' experience in new and traditional media.