Too soon to measure for a coffin

After attending a funeral, it's a Jewish custom to visit the graves of relatives.

Last week, after the burial of an elderly family member, I stopped to place stones on my parents' graves. It's a tradition symbolising the permanence of memory.

Standing at my father Archie's tombstone always brings a smile to my face. He died 14 years ago but was buried in a very old section of Westpark Cemetery, where most headstones date back to the 1940s and 1950s. I remember my mother protesting bitterly, as the coffin was lowered, questioning why he was allocated a plot among all those "ancient" people.

True, my dad was always young at heart, and my fondest memories will be of him standing on the trading floor, order pad in hand, voice booming while he dealt in his passion, De Beers. In his 60 years on the JSE he probably traded in more De Beers than any other broker or institution in South Africa. De Beers's telling contribution to Anglo American's recent interim earnings would have cheered him immensely, rewarding his faith in the world's most notable diamond miner.

For all his 60 years, Anglo American dominated business on the JSE through a wide reach of mining projects and investments in associated industries. It was an era when South Africa was the primary global market for resource shares, when gold miners were listed geologically and there were more collieries on the boards than banks and insurers. Johannesburg's financial district was a succession of monolithic buildings colonised by mining groups such as Anglo American, General Mining, Rand Mines, Anglovaal and JCI.

Driving through Sandton's business quarter these days, gone are traces of our mining past, replaced by modern edifices celebrating the strength of our financial sector and the wealth of our legal and accounting professions. It's testimony to the changing shape of our economy; the decline of the mining and manufacturing industries and the emergence of the services sector.

Anglo American has long relinquished its prime position as the JSE's most valuable company. It's fallen out of the top five, surpassed by, among others, global industrial giants British American Tobacco, SAB Miller, Richemont and Naspers. Anglo's shrinking importance is disturbing, but less so than the withering worth of our gold and platinum miners. Oil and chemical producer Sasol's capitalisation on the JSE exceeds the combined value of our top three platinum mines (Angloplats, Impala and Lonmin) and our top four gold miners (Anglogold, Gold Fields, Sibanye and Harmony).

The deterioration of our mining industry is the outcome of a blend of issues that includes challenging conditions in the global economy, but also embraces self-obliteration from low productivity, rising input costs, damaging strike action, power constraints, excessive wage demands and investment shortages.

A similar demise is threatening our already contracting manufacturing base. The National Union of Metalworkers' successful negotiations for three consecutive years of wage increases, in excess of the official inflation rate, on top of the risk of additional increases in electricity charges, will be more than employers can bear, and will surely lead to further job losses and business closures.

Though it is probably too early to measure the full impact of the recent labour strife on the economy, recent earnings reports and trading updates from Invicta, AECI, Arcelor Mittal and Grindrod are beginning to reflect the severity of the workers' action on the broader economy.

While local mining contribution to the JSE is rapidly diminishing, its place has been assumed by a fast-expanding financial sector. I have often commented on the massive influence of foreign operations on the weighting of the JSE. Of the top 50 shares (accounting for 90% of total market capitalisation), 76% of their earnings are dollar-based. Setting aside the influential offshore component of the JSE, the remaining 24% is made up largely of banks and insurers (16%), retailers (4%), telecoms (2%), property (1%) and healthcare (1%). Manufacturing companies are virtually non-existent on the JSE.

My dad's epitaph reads: A man of humour, his word was his bond. Steve Jobs said death is a destination we all share . While we can accept this of mankind, it need not pertain to industry. It's our obligation to avoid it .