From 2007 to January 2013, the All-Share Index of the JSE rose by around 60%.
In doing so, it actually outperformed the New York Stock Exchange in the same period.
But, as Chamber of Mines president Mark Cutifani pointed out at the recent Mining Lekgotla, mining production fell 10% over the same period and poor investor perceptions weighed on the mining index, causing value destruction of more than 30%.
While other sectors thrived and grew in the new democracy, the South African mining industry destroyed nearly a third of its value – and, ironically, it was mainly mining’s own stakeholders who delivered the blows – which is crazy.
Had mining grown at the same pace as the rest of the South African economy, the total country growth rate would have increased to 3.9% a year, and could well have been pushed to 5% a year, which would have been hugely beneficial.
Instead, the country’s most important industry is in crisis and has not yet found the answer to stemming what Cutifani condemned as “the tide of destruction”.
In the last 12 months, mining has underperformed the JSE All-Share Index still further, and the descent is accelerating.
The people of this country clearly do not really value mining, despite the sector providing nearly 20% of all economic activity and supporting another 25% of additional economic activity.
After so much intense government, business and labour engagement, one would like to be in a position to report that the mining industry was back on an upward trajectory.
But the opposite is the case.
Insecure owners continue to be confronted with amendments to the Mineral and Petroleum Resources Development Act, both labour and capital are on strike, and the industry still has a very long way to go to transform.