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WEIGHT OF PAPER

10th October 2014

By: Darlene Creamer

  

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Mining companies are being weighed down by a surfeit of regulatory obligations that are diminishing the financial resources needed to increase mining output and bringing down export revenues. When South Africa’s trade deficit worsened to the larger-than-expected R16.3-billion in August, analysts pointed to the emergence of structural national weaknesses on top of lower global demand growth for metals and minerals. While rand weakening absorbs some of the shock in the short term, devalued local currency ultimately brings unwelcome inflation. Weakening currency and worsening inflation will collectively make the importation of mining essentials increasingly expensive and shrink output still further.

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