Mining and minerals in South Africa
South Africa, known throughout the world as a treasure trove, boasts an abundance of mineral resources, producing and owning a significant proportion of the world's minerals.
South Africa's wealth has been built on the country's vast resources - nearly 90% of the platinum metals on Earth, 80% of the manganese, 73% of the chrome, 45% of the vanadium and 41% of the gold. Only crude oil and bauxite are not found here.
SA's share of world reserves & production
(Data source: Department of Minerals and Energy)
The country is a leading producer of precious metals such as gold and platinum, as well as of base metals and coal. It is the world's fourth-largest producer of diamonds.
And experts believe there is still considerable potential for the discovery of other world-class deposits in areas that have yet to be fully exploited.
Place in the economy
South Africa's position as the world's largest gold producer - a position it held for over a century - was usurped by China in 2007.
China's gold production for the year was estimated at 276 metric tons by London precious metals consultancy GFMS, and at 270 tons by the China Gold Association. South Africa, according to the Chamber of Mines of SA, produced 254 tons of the metal in 2007.
Gold, once a keystone to the South African economy, has diminished in importance as the country's economy has diversified. In the 1970s and 1980s, gold exports were the predominant source of foreign exchange earnings, with mining contributing around 14% of total value added in the economy. This has shifted over time and, in 2007, mining and quarrying contributed about 5.8% to the country's gross domestic product (GDP).
However, mining as an industry is still crucial to South Africa, with precious metals contributing 65% to the country's mineral export earnings and 21% of total exports of goods in 2006. The country supplies about 80% of the world's platinum.
The mining industry is also South Africa's biggest employer, with around 460 000 employees and another 400 000 employed by the suppliers of goods and services to the industry.
Transformation
Ownership, access and opportunity in regards to the country's mineral resources are regulated by the Minerals and Petroleum Resources Development Act of 2002, which recognises the state's custodianship over the country's mineral resources.
Transformation is a key issue facing South Africa's mining sector. Equitable access to mineral resources and opportunities has been legislated, with meaningful participation of historically disadvantaged individuals the subject of the industry's black economic empowerment (BEE) charter.
Currently, more than 70% of the mining industry's labour force is black, while less than 5% of managerial positions are held by black people. Targets have been set by the government and, by 2009, all mining companies will be expected to have 40% of managerial positions held by previously disadvantaged South Africans.
Other targets over the next 10 years include the transfer of 26% of mining assets to black-owned companies, and ensuring that 51% of future mining projects are controlled by black-owned firms.
Strengths
As a major mining country, South Africa's strengths include a high level of technical and production expertise as well as comprehensive research and development activities.
The country has world-scale primary processing facilities covering carbon steel, stainless steel and aluminium, in addition to gold and platinum. It is also a world leader of new technologies, such as a ground-breaking process that converts low-grade superfine iron ore into high-quality iron units.
This kind of beneficiation, or adding of value to raw mineral materials before export, has been indentified by the government as a major growth area. There are lucrative opportunities for downstream processing and adding value locally to iron, carbon steel, stainless steel, aluminium, platinum group metals and gold.
Industry leaders
Two of the world's biggest mining companies originated in South Africa. BHP Billiton, the world's largest mining company, came after a merger between South African company Billiton and Australian firm BHP.
Anglo American Plc, which has its primary listing in London and its secondary listing in Johannesburg, owns many major subsidiaries, such as Anglo Platinum, Anglo Coal, Impala Platinum and Kumba Iron Ore.
Diamond miner De Beers, also a South African company, is owned by Anglo American and a consortium led by the Botswanan government. The world's top diamond producer churned out about 51.1-million carats in 2007.
New developments
There are many new developments in the pipeline for South African mining. These include:
Article last updated: May 2008
SAinfo reporter. Sources:
- South Africa Yearbook
- Department of Minerals and Energy
- Chamber of Mines of South Africa
- Standard Bank: Economic Profile: South Africa 2007
- Business Day
- Mining Weekly
- Mineweb
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