South Africa’s mining industry contributed R356-billion to the country’s gross domestic product (GDP) in 2018, an increase on the R335-billion contribution in 2017, the Minerals Council South Africa ‘Facts and Figures 2018 Pocketbook’ shows.
The pocketbook, which was released on Monday during a State of the Mining Nation media briefing at the Investing in African Mining Indaba, in Cape Town, provided preliminary insights into the performance of the country’s mining industry.
The Minerals Council pointed out that the industry had, during 2018, contributed R93-billion to fixed investment and sold R475-billion in primary mineral sales.
Further, it paid R22-billion in taxes – a R3-billion, or 16%, increase on 2017 – and R7.6-billion in royalties – a 31% increase on 2017.
During 2018, the mining industry paid employees R127.4-billion, compared with the R126-billion paid to employees in 2017, and contributed R21-billion to pay-as-you-earn tax on behalf of employees.
The report indicated that the industry employed 453 543 people, resulting in around 1.4-million indirect jobs, and based on estimates, these employees supported around 4.5-million dependants.
During 2018, the mining industry’s growth rate was greater than that of the national economy; however, the report did note that the national growth rate of 1.2% was “disappointing”.
A positive element highlighted was that employment in some sectors, including coal, iron-ore, manganese and chrome, had grown during the period. However, this growth was offset by lower employment in gold and platinum, resulting in a net job loss in the sector.
The industry also experienced input cost inflation of about 6%. Industrial chemicals and petroleum were key drivers of the inflation profile. On aggregate, rand commodity prices increased by 1.7%, representing a considerable negative differential between input cost inflation and selling price inflation.
Owing to the combination of rand commodity prices stagnating since their peak at the beginning of 2017, and costs rising faster than the prices received, the mining industry has been in a “profit squeeze” for at least the last five years. This has had a direct negative impact on dividend payments to investors.
In terms of safety, the Minerals Council reported that the number of fatalities within the mining industry had decreased to 84 in 2018, compared with the 89 fatalities recorded the year before.
This follows after two years of increases in the mining industry’s fatality rate.