Minerals Council ‘cautiously optimistic’ for 2024

Mining reports fall in production, GDP contribution in 2023

05 February 2024 - 12:52
By Dineo Faku
The logistics crisis hampered coal exports in 2023, and impacted on the iron ore and chrome sectors. File photo.
Image: SANDILE NDLOVU The logistics crisis hampered coal exports in 2023, and impacted on the iron ore and chrome sectors. File photo.

The Minerals Council South Africa, a lobby group for the mining industry, reported a fall in mining production in 2023 to R1.1-trillion from the high of R1.2-trillion a year earlier, as weaker commodity prices and logistics constraints curtailed exports.

Presenting its fact and figures for 2023 on the sidelines of the Investing in African Mining Indaba in Cape Town, the council said based on current prices the mining industry's direct contribution to GDP fell to R425.6bn from R483.3bn a year earlier, translating to a 6.2% contribution to GDP, down from 7.3% in 2022.

The coal sector was the hardest hit as prices were down 55% in 2023 from highs the year before.

The logistics crisis not only hampered coal exports in 2023, it also affected the iron ore and chrome sectors.

Council CEO Mzila Mthenjane said he is cautiously optimistic for the year ahead, adding the industry had to reposition itself.

“The mining industry has to position itself for a new coming. It has to be fit and strong for that cycle,” he said.

Last year platinum group metals companies including Sibanye-Stillwater announced restructuring of their shafts on low prices and high input costs.

Council mining chief economist Hugo Pienaar said despite the industry's lower contribution to GDP it continued to be vital for the economy. He said this is because the mining industry's contribution to GDP is double that of the agriculture sector and three times the construction sector.

Pienaar said while some mining companies are planning to restructure their operations, up to the third quarter of last year the mining sector was the only sector that created formal employment besides the public sector.

He said the industry employed 477,000 people, up from 469,353 in 2022.

“We should not think of the overall mining sector as a sunset industry,” he said.

The industry expects the government to announce permanent executive management for Transnet, he said, including a permanent group CEO and Transnet Freight Rail (TFR) CEO, in the year ahead.

“The mining sector requires logistics to perform so we can have a decent current account.”

In 2023 coal exports from Richards Bay fell to the lowest level since 1993 at 50.35-million tonnes.

Last year Transnet CEO Portia Derby resigned, followed by TFR CEO Sizakele Mzimela.

Business Times