Business Monitor International


South Africa Mining Report

Published 06 October 2014

  • 98 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
South Africa Mining Report

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. The coal and iron ore sectors will come under pressure as particularly weak prices dent production growth. We expect South Africa's mining industry value to grow at an annual average rate of 0.8% between 2014 and 2018, from USD32. 6bn in 2014 to USD33. 7 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.

Lacklustre Growth
South Africa - Select Mineral Production % Growth y-o-y

Industrial unrest will continue to be a major challenge. The precedent set by Lonmin offering a 22% pay rise for workers...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
11
Coal: Highlight Of The Mining Sector
11
Table: South Africa - Major Projects & Expansions
11
Domestic Consumption To Temper Export Boom
12
Infrastructure A Major Downside Risk
13
Carbon Tax Threat Abated
14
Table: Coal Production Forecast (South Africa 2010-2018)
14
Diamonds: Promising Outlook
15
Downside Risks
16
Table: South Africa - Largest Diamond Projects
16
Table: Diamond Production (South Africa 2010-2018)
17
Gold: Output Decline To Continue
17
Potential Upside-
20
Table: Gold Production Forecast (South Africa 2010-2018)
20
Iron Ore: A Bright Spot For South Africa
20
Table: South Africa - Major New Iron Ore Projects & Expansions
22
Risks Lurking On The Horizon
23
Table: Iron Ore Production Forecast (South Africa 2010-2018)
23
Platinum: Divestments Ahead
23
Wage Costs Will Continue Rising
24
Mine Depletion & Power Constraints To Further Raise Costs
26
Diminishing Revenue To Drive Divestment
27
Table: South Africa - Platinum Mine Production & Growth
28
Palladium: Output To Stagnate
28
Table: South Africa - Largest Palladium/Platinum Development Projects
30
Table: Palladium Production (South Africa 2010-2018)
30
Industry Risk Reward Ratings
31
Risk/Reward Ratings
31
Botswana On Top
32
Table: Africa - Mining Risk/Reward Ratings
33
South Africa: Still Ranking Highly
33
Lower Gold Prices Reduce Rewards
34
Risk/Reward Ratings
36
Rewards
36
Industry Rewards
36
Country Rewards
36
Risks
37
Industry Risks
37
Country Risks
37
Table: South Africa - Major Mining Expansion Plans
38
Table: Mining Industry Forecasts (South Africa 2010-2018)
38
Regulatory Development
40
Table: Africa - Mining Regulatory Outlook
40
Table: South Africa Political Overview
43
Commodities Forecast
45
Commodity Strategy
45
Ferrous Metals:
45
Iron Ore: Price Slump Overdone, Stabilisation In Sight
45
Steel: Price Forecast Revised Up
46
Non-Ferrous Metals:
48
Aluminium: Recent Break Signals Multi-Month Strength
48
Copper: Subdued Prices Into Q314
49
Lead: Prices To Strengthen As Deficit Deepens
50
Nickel: H214 Rally Unlikely
51
Tin: More Resilient Than Other Metals
52
Zinc: Sustained Break Unlikely
54
Table: Select Commodities - Performance & BMI Forecasts
55
Competitive Landscape
57
Table: South Africa - Largest Mining Companies' Financial Data
58
Company Profile
60
AngloGold Ashanti
60
Overview
62
Strategy
63
Risks
64
Latest Results
64
Table: AngloGold Ashanti - Key Financial Data
65
Anglo American
66
Company Strategy
69
Latest Results
70
Table: Anglo American - Financial Data
71
Impala Platinum
72
Table: Impala Platinum - Key Financial Data
75
Regional Overview
77
Mining - Africa Overview
77
Key Opportunities
77
1
77
2
79
3
80
Key Challenges
81
1
81
2
82
3
83
Table: Africa - Key Mining Regulatory Developments
84
Global Industry Overview
86
Challenges
86
Table: Mining - Select M&A Deals
90
Cause For Optimism
93
Methodology
100
Industry Forecast Methodology
100
Sources
101
Risk/Reward Rating Methodology
102
Table: Weighting Of Indicators
104

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.

Key Benefits

  • 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.

Coverage

BMI Industry View

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 Rankings

BMI's Mining Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (mining companies and support service providers) in the regional mining market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry rankings products.

Key Projects

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-2018 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-2018 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.

Company Profiles

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc