JOHANNESBURG (miningweekly.com) – Mining was at the core of South Africa’s economy and was one of the top five priority sectors that government was focusing on, Chamber of Mines COO Roger Baxter emphasised during the fourth Africa Iron Ore Conference, in Johannesburg, on Wednesday.

He stated that the mining sector’s contribution to the economy was not insignificant, contributing 18% on a multiplied basis to the country’s gross domestic product (GDP).

“Mining is the flywheel of South Africa’s economy and when the mining sector is not doing well, it is reflected in the economy, which we have seen in the first quarter of this year with the strikes in the platinum sector,” he said.

He added that, during the first half of the year, mining had experienced a 24% decline in its contribution to the GDP, the biggest rate of decline in mining output in the last 47 years.

“The country’s economic growth in the last two decades has been just above 3%, with the recent growth rate being 2%. That translates into South Africa doubling its economy in 35 years, which is too slow and not sustainable from an economic and social perspective,” Baxter stressed.

He cited that making the country’s economy more inclusive as it grew was critical and that the biggest problem was that nontradable domestic consumer sectors such as financial services, wholesale and retail trade had seen most of the growth in the past two decades.

“Tradable exports have grown at a much slower pace, resulting in the country consuming more than it produces,” he said.

Baxter added that the National Development Plan (NDP), which was put forward as the focus of economic policy-making at the African National Congress’s elective conference, in Manguang, in 2012, recognises that tradable export sectors needed to grow at a faster pace for the country to have more sustainable, balanced and inclusive growth.

He believed that mining had a lot of potential to contribute towards that goal.

The specific policy resolutions in the NDP related to State intervention focused on beneficiation and the declaration of strategic minerals.

“From the Chambers of Mine’s perspective, the policy resolutions are supported and they make a lot of sense,” he said.

Baxter explained that South Africa beneficiates a significant portion of its minerals, with 80% of the country’s steel being produced locally, from locally mined minerals.

He pointed out that Sasol had mined R11-billion worth of coal in 2012 and generated R165-billion worth of sales value, which, he said, was another good example of beneficiation in the mining sector.