Mining unrest cost R10.1bn

The strikes at platinum and gold mines have so far led to production losses of R10.1 billion, Finance Minister Pravin Gordhan said in his Medium-Term Budget Policy Statement.

"National Treasury estimates that the total value of production lost to platinum and gold mining strikes and stoppages since the opening of the year, has amounted to about R10.1 billion."

Gordhan said the deadly turmoil in the mining industry was having a significant effect on the wider economy, and growth would not rebound this year.

"The events at Lonmin's Marikana mine and the spread of industrial action since August have dented confidence and lowered growth prospects for the remainder of the year."

He added that lower mining output and the spread of labour unrest had slowed related industries, and would impact negatively on GDP, tax revenues, exports and employment.

"The impact will be larger if strike activity is protracted," he warned.

Overall mining output fell 3.3 percent in the year to August, while platinum group metals output was 15.3 percent lower, Gordhan said.

This sharp decline in platinum production saw real value added in mining contract by 6.3 percent in the first half of the year, compared to the same period in 2011.

Woes add to deficits

The unrest in the mining sector has contributed to a decline in exports and a widening trade balance, Gordhan said.

Export volumes fell by 6.3 percent in the second quarter, while imports grew by 20 percent in the same period, he said in his Medium-Term Budget Policy Statement, tabled in Parliament.

Gordhan said exports to the European Union and Japan declined, while those to the United States remained flat. On the other hand, exports to China, India and the Southern African Development Community improved.

"Disruptions to platinum output affected trade with Germany, Japan and the US, while China's higher demand for coal offset lower steel imports. There was a notable decline in export of motor vehicles to Germany."

Exports to the SADC bloc, currently South Africa's second-biggest export market, had increased rapidly in recent years, due to purchases of steel, chemical products and mining equipment.

Gordhan forecast that SADC could "soon" become the country's biggest market for manufactured goods.

He said export growth was expected to improve over the medium term as mining production stabilised, and trade with emerging African economies became a larger share of total exports.

The Treasury chief confirmed that the weaker rand, also in part due to the protracted spate of wildcat strikes at mines, had failed to boost manufacturing export growth.

According to Treasury estimates, the total value of production lost to platinum and gold mine strikes came to R10.1 billion so far.