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PRECIOUS PLUNGE

30th August 2013

By: Darlene Creamer

  

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Mining has the potential to grow South Africa’s gross domestic product significantly, which is its main potential contribution to the country. But it needs investment flow and currently investors are deserting it. Mining’s equity model is at breaking point and the huge advantage of capital inflow is being lost to South Africa. Battered externally by flat world markets and internally by restive labour, South Africa’s two biggest mining employers by far, the precious metal pair of gold and platinum, are largely loss making, or in more common parlance, struggling under water and needing the oxygen of higher metal prices and a collaborative work force. South Africa needs investor confidence, political certainty and the capacity to deliver, without which there can be no economic growth and thus no economic transformation. Because the mining economy can grow the overall South African economy many notches higher, it is essential that South Africa puts positive emphasis on its invaluable mining economy.

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