BMI View: The past decade of minimal growth in South Africa's mining sector is set to continue as the country's gold and platinum sectors face diminishing margins and industrial strife. Potential for growth in the iron ore and coal sectors constitute bright spots for the mining industry in the long term. We expect South Africa's mining industry value to grow by an annual average rate of 0.8% between 2014 and 2018, from USD32. 4 bn in 2013 to USD33. 5 bn in 2018.
South Africa's share of global mined output is set to decline as other mining jurisdictions experience faster rates of growth. We expect investment, particularly in gold mining, to be more attracted to low-cost, high resource opportunities in the rest of the continent such as the Democratic Republic of Congo.
South Africa's mining sector is amenable to investment, with few obstacles confronting foreign companies wishing to enter. The government is generally stable and South Africa's business environment is one of the best on the continent.
In Q114, Parliament's ratification of the long-awaited amendments to the Mineral and Petroleum Resources Development Act turned out to be a net positive for the mining sector. Although the new law will allow the government greater powers in the mining sector and will bolster South Africa's beneficiation drive, the removal of uncertainty around these issues was a crucial undertaking. Mining companies responded positively, grateful for their consultation in the decision-making process. Moreover, the changes which were finally implemented had been greatly modified from original proposals.
A carbon tax, which had initially been proposed for implementation in 2015, has now been pushed back to 2016 at the earliest. This development provides welcome news for coal miners in the country.
| Modest Growth Ahead |
|South Africa: Select Minerals, Growth Forecast, % chg y-o-y|
Industrial unrest will continue to be a major challenge. The precedent set by Lonmin offering a 22% pay rise...
The South Africa Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's South Africa Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in South Africa.
- Use BMI's independent industry forecasts on South Africa to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in South Africa's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in South Africa.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.
Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
Business Environment Ratings
BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.
BMI Industry Forecasts
Historic data series (2009-2012) and forecasts to end-2017 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:
- Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
- Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
- Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
- Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.
BMI Macroeconomic Forecasts
BMI forecasts to end-2017 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).
Competitive Landscape Tables & Analysis
Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.