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“Role of the South African Mining Industry in South
Africa’s Growth and Development Plans”
Roger Baxter
Senior Executive: Economics & Strategy
Back ground presentation to a Harmony Sponsored Investor
Forum,
25 March 2013
Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
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Commodity outlook, short-term stress, long-term growth in demand
SHORT-TERM WEAKNESS
• World economy is recovering from the 1st global recession in 61 years.
• Recovery is unevenly distributed, with advanced economies sluggish and developing countries growing at a faster pace.
• The recession in the Eurozone and the soft landing in the Chinese economy has negatively impacted South Africa.
LONG-TERM STRUCTURAL FUNDAMENTALS IN PLACE
• The materials intensive nature of growth in emerging economies will escalate in the next decade caused by continued urbanization and industrialization.
• Supply will struggle to meet the growth in demand.
• Companies now focused on value vs growth.
The prospects of Commodities at a global level are mostly driven by economic growth
SINCE 2008, THE GLOBAL COMMODITIES MARKETS HAVE BEEN
HIT BY THE MULTIPLE EFFECTS OF:
• The “W” shaped boom-recession-recovery-recession-slow recovery in the
EuroZone due to the sovereign debt crisis
• The slowdown in economic growth in China (towards a soft landing).
• The “V” shaped boom-recession-recovery and then continued below potential
growth performance of the US economy.
BUT PROSPECTS ARE LOOKING UP:
• Despite ongoing structural issues the Eurozone is expected to post a modest
positive growth rate in 2013.
• China’s economy has stabilised and is expected to grow at >8% in 2013.
• The US economy is showing positive signs of recovery, with consumer
confidence rising.
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The World economy is recovering
Source: IMF WEO October 2012
-5
-3
-1
1
3
5
7
9
11
13
15
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
% G
DP
gro
wth
rate
Economic growth rate in USA, EU and China
China
United States
European Union
Economic weakness in EU zone resulted in downward pressure on the spot price of Platinum
� GDP is a key driver to Pt demand
� Pt demand is mainly driven by carbon emission legislation hence Euro dependence
� Europe consumes 40% of Pt demand and 40% is used in autocats
� Platinum has not recovered because its demand most impacted by Euro crisis and increased recycling
� Automotive producers have reduced load rates and thrifted away from platinum towards palladium
Source: IMF, Johnson Matthey
6
4.800
5.000
6
4.400
6.800
4.600
6.400
5
5.200
5.400
5.600
5.800
6.000
4
3
2
1
0
-1
-2
-3
6.600
-5
201220112010200920082007
-4
200520042003200220012000
6.200
2006
Pt Demand (koz) - RH Axis
Euro Area GDP, % change
World GDP, % change
Historic GDP & Pt Demand
GD
P -
% c
hange
ko
z P
t
Financial Crisis
Year
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Risks at the Global level remain…….
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
% o
f G
DP
Gross public debt as a % of GDP
Germany
Japan
United Kingdom
United States
Source: IMF WEO Oct 2012
Despite the volatility in the short-term, the long-term fundamentals remain for in place for continued growth in commodity demand
• Long term drivers of the structurally driven commodities boom remain intact:
» Trends in urbanization and industrialization appear to be entrenched for the next few decades in China, India and other EMs.
» By 2050 another 3 billion people at the global level will urbanize. Most of this urbanization will take place in emerging market economies (UN population division).
» The infrastructure expenditure to accommodate global urbanization is significant.
» The quantity of minerals required to support this urbanization is significant.
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World urban population growth
(Billion people)
Rising urbanisation, 3 billion people to urbanise by 2050 (most of the growth in Africa)
Source: UN, McKinsey
0.4
0.5
0.5
0.8
0.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
2010 Urban Pop. China India Other Asia Africa RoW 2050 Urban Pop.
The world is set to urbanise close to another 3 billion people by the middleof the century
Fixed investment will mostly be into infrastructure in emerging economies…….
Source: IMF WEO Oct 2012
0
5
10
15
20
25
30
35
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
% o
f G
DP
Fixed investment expenditures
World
Advanced economies
Emerging market and developing economies
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Copper, 27
Iron ore, 21
Thermal coal, 16
Gold, 15
Coking coal, 11
Nickel, 11Uranium, 1
Citibank - growth projects by commodity on a production volume basis, 2011-2020
Top 6 minerals, expected greenfield production growth for the period 2011-2020
Source: CitiBank
Shifting Risks: The Game is Changing (E&Y) (countries want a bigger share)
1. Skills shortage
2. Industry consolidation
3. Infrastructure access
4. Maintaining a social license to operate
5. Climate change concerns
6. Rising costs (cost inflation)
7. Pipeline shrinkage
8. Resource nationalism
9. Access to secure energy
10. Increased regulation
Source: “Business Risks Facing Mining and Metals, 2012-2013, Ernst & Young
1. Resource nationalism
2. Skills shortage
3. Infrastructure access
4. Cost inflation
5. Capital project execution
6. Maintaining a social license to operate
7. Price and currency volatility
8. Capital management & access
9. Sharing the benefits
10. Fraud and corruption
20122008
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Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
Perceptions about Mining by RSA’s people in general
•Little link made between role of minerals and the functioning of a modern society.
•Little credit given to the mining industry for playing a key role in South Africa’s economic development over past 130 years, which has transformed South Africa into the most industrialised country in Africa
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Metals and minerals in a Smart Phone
• Copper (16 grams) ¹
• Silver (0.35 grams) ¹
• Gold (0.034 grams) ¹
• Palladium (0.015 grams) ¹
• Platinum (0.00034 grams) ¹
• Ceramic magnetic switches containing rare earths ²
• Indium²
• Titanium dioxide ²
• Indium tin oxide ²
• ¹ source – USGS http://pubs.usgs.gov/fs/2006/3097/• ² source – NRC critical minerals report
Metals and Minerals in a car
• 960kg iron &steel
• 109kg Aluminum
• 22.7kg Carbon
• 19 kg Copper, 34kg for a
hybrid
• 19kg Silicon
• 11 kg Lead
• 10kg Zinc
• 7.7kg manganese
• 6.8kg Chromium
• 4.1kg Nickel
• 0.4 kg Platinum
•+Antimony, barium, beryllium, cobalt, gallium, gold, magn
esium, molybdenum, neodymium, indium, palladium, Sulp
hur, rhodium, silver, strontium, tin, titanium, tungsten, vana
dium, zirconium.
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Even a Wind Turbine uses a significant amount of metals and minerals
• 335 tons of steel
• 4.7 tons of copper
• 13 tons of fiberglass
• 3 tons of aluminum
• 1,200 tons of
reinforced concrete
• Silica
• Limestone
• Aluminum
• Phosphate
• Fluoride
• Titanium
• Mica
• Petroleum
Even a bright smile, even comes from mining…….
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Perceptions and realities about mining
PERCEPTION REALITY
Is a “Dirt Digger” Another R300 billion and 150 000 jobs
created in downstream industries
Is uncaring about the lives of workers and
does not pay well
67% reduction in fatality rate, average
wages per employee up 12% p.a.
Does not care about the environment,
communities –Poverty at the doorstep of
prosperous mines
Spent R1.4 billion on communities, R4
billion on skills and R25.8 billion in
corporate taxes in 2011.
Profits and benefits exported to a small
bunch of Capitalists
Shareholders balanced 50% local, 50%
offshore, R12 billion in dividends
Resistant to Transformation >R150 billion in BEE deals concluded,
good progress on all pillars of Charter
Does not matter to SA- Ingi Saldago-
Business Report-”Eskom was right to
switch off the Mines”
19% of GDP, 50% of exports, 1.3 million
jobs, 94% of electricity, 17.2% of
corporate tax
The ANC Mangaung Elective Conference
• ANC rejects wholesale nationalisation as a policy option.
• ANC has adopted the National Development Plan as a key
strategic area.
• Over the next five years, the ANC will take decisive and resolute
action to overcome the triple challenges of poverty, inequality and
unemployment, which are at the heart of South Africa’s socio-
economic challenges.
• The most effective weapon in the campaign against poverty is the
creation of decent work, and creating work requires faster and
more inclusive economic growth.
• Using South Africa’s natural resources in a manner that benefits
the nation as a whole.
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The ANC Mangaung Elective Conference
• State intervention with a focus on beneficiation for
industrialisation is urgently required.
• The state must capture an equitable share of mineral resource
rents through the tax system.
• Strategic minerals will be investigated and declared.
• Strengthening of the state mining company.
• Mining should create safe and decent work, and mineral
extraction should not compromise local communities or the
environment.
• There is a need to develop and enhance mineral knowledge
linkages.
The Chamber of Mines supports the ANC Policy Resolutions
• A greater degree of certainty is emerging.
• In a number of areas the “how” is critically
important.– Encouraging further beneficiation is an important issue and
further work on implementation plans is underway.
– Energy security can be guaranteed through private sector
investment and cooperation between government and the
private sector.
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Draft MPRDA Amendment Bill, gives expression to MIGDETT process and ANC Policy Resolutions
• Consolidate environmental licensing under DMR as the lead
authority (move to smart tape away from red tape).
• Streamline license application system.
• A strong emphasis on promoting greater downstream beneficiation.
Details of the beneficiation implementation plans still being
developed.
• Penalties for non-compliance are increased.
Stakeholder engagement process on Amendment Bill underway.
Mining taxation review announced
• The State President and Minister of Finance have announced a review of taxation, including a review of mining tax in 2H13.
• The Chamber looks forward to engaging government on this important review.
• Our objectives are to focus on a competitive, stable and predictable mining taxation and royalty system that encourages growth and investment, and fairly balances these industry needs with those of the State.
• The Treasury has a strong track record of significant engagement with affected stakeholders and pragmatism on competitiveness drivers.
• The taxation review will need to consider not only direct taxes and royalties, but the plethora of other indirect taxes (including social taxes) that the industry contributes to the country.
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RSA mining sector hit by unprotected strikes
• The industry was hit by a set of unprotected strikes in 2012.
• Platinum, gold and iron ore were all affected by the strikes.
• A confluence of factors contributed to the situation in certain areas such as Rustenberg:
– Weak local government
– High growth in urbanisation
– High levels of poverty and unemployment
– Inter union rivalry, etc.
• About R15 billion in production and sales was lost due to these strikes in 2012.
Marikana tragedy
• Illegal strike
• 50 people killed in August 2012
• Front line news around the world (SA’s image as investment
destination tarnished)
• Contagion to rest of mining sector
• Rand weakens
• Commission of enquiry appointed
• Sector moves quickly to calm down the situation and engage
key stakeholders
• Industrial unrest impacts platinum, gold and iron ore sectors
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The recent negative news items have resulted in volatile exchange rate
Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
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Role of Mining often Underestimated
•Key foundation industry (enabled SA to become the most industrialised country in Africa)
•Large employer of semi-skilled and skilled workers
•Critically important NET generator of FOREX
•Significant multipliers into the rest of the economy (large procurement, investment and wage spender)
•Equally important, very large magnet for foreign investment inflows (which help fund current account)
•Significant contributor to transformation in the economy
The linkages of mining to the economy
Mining’s direct contribution:
•GDP R230 Billion or 9% of GDP
•Jobs 499 217
The Induced Impact:
•GDP R136,1 billion or 6% of GDP
•Jobs 496,319
First round impact:
•GDP R59 billion or
2.3% of GDP
•Jobs 207 949
Indirect impact
•GDP R42.7 billion or
1.7% of GDP
•Jobs 149,898
The Total Contribution of Mining to the Economy
•GDP R468 billion or 18.7% of GDP
•Jobs 1,353,383 (16.6% of total employment)
Source: Quantec & IDC, 2010 data
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Downstream beneficiation is far bigger than people think!
• About 99% of RSA's cement is made locally from locally mined products
• 80% of RSA's steel is made locally from locally mined iron ore, chrome, manganese, coking coal
• 30% of RSA’s liquid fuels are produced from locally mined coal
• 94% of RSA's electricity is produced from locally mined coal
• Most of our domestic chemicals, fertilisers, waxes, polymers, plastics, etc., are fabricated using locally mined minerals & coal
• 13% of the world's platinum catalytic converters are made in RSA, and so on
Overall another R300 billion in sales value and >150 000 jobs are created in the downstream beneficiation industries. Extra value is
being created where the commercial opportunities exist
Side-stream beneficiation is a significant industry in its own right
• Significant industries have developed to provide goods and services to the mining sector:
• The Johannesburg Securities Exchange was established in 1887 and is the world’s 22nd largest exchange.
• Financial and legal services were started to support mining and now accounts for 20% of GDP.
• Significant education, skills development and knowledge cluster has evolved and developed around mining.
• The development of infrastructure (rail, ports, electricity, etc.) is still dominated by demand from mining.
• A significant manufacturing sector still supplied goods into mining, steel, mining equipment, explosives, etc.
Overall, this industry is significant (2.3% of GDP and >200 000 jobs) and has become a big exporter into the rest of Africa.
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Minerals & Metals In South Africa: A Significant Value Added Cluster
ScienceTechnology
Exploration
Geoscience
Suppliers
Mining is one of the most extensive and best developed South African industrial clusters
Extensive sciences & technology network/research
Broad expertise in geoscience
Large exploration expertise
Large number suppliers of equipment and services
World class educational and skills development systems and institutions
Sophisticated financial institutions (JSE, banks, legal)
Large scale smelting and refining.
Mining
SmeltersRefineries
GovernancePolicy
Equityfinancing
Professional
schools
South Africa has significant geological potential
0 10 20 30 40 50 60 70 80 90 100
PGM's
Manganese
Chromium
Gold
Alumino-Silicates
Vermiculite
Vanadium
Zirconium Minerals
Titanium minerals
Fluorspar
Antimony
Phosphate rock
Nickel
Uranium
Lead
Coal
Zinc
Silicon
Iron ore
% of global .South African reserves for key minerals, 2008
1
1
1
1
1
2
2
2
2
2
4
4
5
5
6
8
8
8
9
South Africa, is not mature mining real estate! The country still has
significant geological potential
Global rank
Source: DMR/USGS
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Mining has significant potential
• If growth constraints can be removed mining can:
– Grow at 3% to 5% p.a., resulting in a much more balanced
country growth rate (double size of mining by 2028).
– If mining had grown at same pace as rest of economy
between 1994 and 2011, it would have increased the
country’s growth rate to 3.9% from 3.2%, a significant
difference.
– At a 5% growth rate, the mining industry can increase
exports and reduce the savings-investment constraint.
– Add another 100 000 to 200 000 direct jobs.
Rough growth potential of some of the bulks:
• Iron ore could double production within 5 to 10 years to >100
million tons (MT) per year by 2020. Employment could rise from
18 000 to 30 000 people. Biggest constraints: rail
• Coal production has to rise from current 254 MT p.a. to 355 MT by
2020 to satisfy Eskom, Sasol & exports. Jobs could increase from
current 73 000 to 100 000 by 2020. Biggest constraints:
rail, regulatory issues (environmental).
• Manganese could double/treble production from the current 7.2
MT to 15MT/20MT by 2020. Employment could rise from current
5879 to >10 000 in this period. Biggest constraint: lack of access
to efficient cost competitive heavy haul rail
These three bulks could significantly increase their export
earnings and GDP contribution and add about 50 000 jobs, if
the constraints are resolved.
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Two scenarios were developed for the forward looking scenarios
Current constraints are
relieved
Constrained by current
bottlenecks
Costs grow at
historic rates
Cost increases are
reduced to half of
historic rates
Cost Management
A‘Low
road’
‘High
road’
CB
D
Prod
uct
ion
gro
wth
A “high road” is very possible for South Africa’s
mining sector
Source: McKinsey
But RSA mining has not met its potential
• RSA mining missed out on the last commodity boom with a -
1% p.a. decline in mining GDP between 2001 and
2008, versus 5% growth rate in top 20 mining economies
mining sectors.
• Sector has been affected by a set of unprotected strikes.
• Investor confidence in RSA mining and RSA economy has
been affected.
• RSA only accounts for 3% of new Greenfields projects in next
decade (versus 38% share for Australia) despite having
world’s largest in situ value of mineral resources.
• The largest component of mining, platinum mining, is
experiencing significant challenges with about half of the
industry being marginal at current prices.
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Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
South Africa: Going for Sustainable, Balanced and Labour Absorptive Growth
•Progress has been made to get the economy back on to a higher growth path (3.2% 1994 to 2012).
•However, SA’s labour participation rate at 42% is low vs peers (~61%), its unemployment rate is too high (>20%), its levels of income inequality are very high (Gini coefficient 0.59) & too many people are caught in the poverty trap.
•Government has now placed the creation of meaningful employment as a central objective of economic policy.
•All parties recognise that higher levels of sustainable, balanced and labour absorbing economic growth is key to reducing unemployment
•Government has developed the National Development Plan and the New Growth Path focusing on economic growth and employment creation.
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South
Africa
While South Africa’s growth rate has risen to 3.2% p.a. 1994-2012, it is just too slow to meaningfully tackle
unemployment & poverty
Too much of the economy’s recent growth has been driven by credit fuelled non-tradable demand side, &
tradable export sectors have languished…..
Non-tradable sectors
Source: StatsSA
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1 800 000
2 000 000
R'm
illio
ns
South Africa: Contribution to GDP in real terms, non-tradable vs tradable sectors of economy (real terms)
Non-tradable
Tradable
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The Only Way that South Africa can reduce its high unemployment rate is through more balanced growth and the growth of the key export sectors (e.g. mining)
•RSA cannot solve its unemployment and poverty challenges on
the basis of an advanced economy “American growth model”
(credit fueled, consumer driven, import intensive and imbalance
creating growth in the non-tradable sectors).
• All parties recognise that higher levels of sustainable, balanced
and labour absorbing economic growth is key to reducing
unemployment (i.e. get tradable export sectors to boom).
•Government has developed the New Growth Path focusing on
economic growth and employment creation.
To ensure more balanced and higher levels of growth & job creation the country needs its tradable
export sectors to grow at a much faster pace
THIS IS WHERE MINING FITS IN.
• Mining has a very large employment, foreign exchange earning and
GDP multipliers.
• The New Growth Path and National Development Plan both
recognise the critically important role that mining can play in growing
investment, exports, GDP and the multiplier effects.
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Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
Competitiveness drivers
The key threats to competitiveness of SA
mining are:
▪ Infrastructure (electricity, rail)
▪ Policy uncertainty and some challenges in regulatory framework
▪ Social licence to operate1
▪ Human capital/ skills
▪ Institutional capacity
▪ Rapidly rising costs
Competitiveness drivers of mining
SOURCE: McKinsey & Company
Competitiveness threat
Competitive advantage
Mixed picture
Market context
Regulatory environment
Product demandEnabling factors
Infrastructure
Ease of doing business▪ Social licence
▪ Security of tenure▪ Rule of law
▪ Macroeconomic stability
Factor market efficiency
Industry structure
Inherent potential
Natural resource endowment
Human capital/ skills
Geographical factors
Accessibility of markets
Domestic demand
International demand
Regulatory and legal requirements
Institutional capacity
1 Dealt primarily in sustainability and transformation workstreams
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Enabling factors:
• Ease of doing business – SA favourably ranked in top quartile.
• Infrastructure – at a general level SA’s infrastructure is ranked as
reasonable, but specific constraints have emerged (rail & electricity)
• Social license to operate (safety, health, environment, etc.,) -
important component of the industry’s long term license to operate.
• Macroeconomic stability – the country has adopted prudent
macroeconomic policies, but volatile exchange rate is a challenge.
• Political stability – SA is a stable constitutional democracy.
• Technological readiness – SA ranks in 3rd quartile, but firm level
technology absorption is in top quartile.
• Business sophistication – SA ranked favourably in 2nd quartile.
• Innovation capability – SA ranked favourably in 2nd quartile, with
quality of R&D & scientific research organisations in top quartile.
South Africa is ranked 39th easiest place to do business
(out of 185 economies)
BadGood
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South Africa has excellent policy potential assuming best practice
• The country’s mineral laws are congruent with global best practice (MPRDA, taxation system and Royalty Act).
• Recent policy uncertainty regarding the nationalisation debate has been negative (but is now resolved).
• Unfortunately, this uncertainty is reflected in the 2013 Fraser Institute Survey which ranks South Africa in position 64 out of 96 countries.
• An MPRDA Amendment Bill has been released for public comment (significant engagement is taking place).
• A country taxation review is scheduled for 2h13.
Infrastructure challenges/opportunities:
Example of Rail
•Only 13% of SA’s freight is carried by rail, but more than half of
Transnet’s business is bulk commodities.
•Coal exports on Coalink line in 2012 only back to 2005 levels and
below installed capacity of 74 MT and 90MT capacity of RBCT.
•Cost effective rail capacity critically important for growth of the
coal, manganese and ferro-chrome sectors.
•Getting rail right presents significant opportunities for unlocking
growth in bulk commodities.
•Mixed messages from Transnet – they believe bulk exporters are
cross-subsidised by other users.
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0
10
20
30
40
50
60
70
80
90
China Brazil Australia South Africa Other
% o
f g
lob
al
Global manganese basins and production
reserves Share of global production
Despite having 80% of the world’s HG manganese, RSA supplies only 15% of supply
Input costs are increasing at a very rapid pace
A large proportion of the input costs are driven by “administered prices” such as electricity & water or by international pricing (steel
and diesel). Between 2007-2012:
• Electricity prices to the mining sector has risen from 18 c/kWh in 2007 to 61c/kWhin 2012. This is a significant 238% increase.
• Diesel costs have risen by an average of 15.7% per annum on the back ofhigher international oil prices (up 69.3% overall).
• Reinforcing steel prices have increased by 15.3% per annum in the sameperiod (57.5% in total).
• Average remuneration paid per worker employed in the RSA mining sectorgrew by 12% per annum between 2007 and 2012, nearly 5 percentagepoints higher than producer inflation.
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Inflation in input costs has simply been too high (and mostly out of control of the miners)
4.4
7.2
9.1
11.2
12
15.3
15.7
18.1
26
0 5 10 15 20 25 30
Mining machinary
Total producer price inflation rate
Cement
Structural steel
Labour costs
Reinforcing steel
Diesel
Pgm mining cash costs per 4e ounce
Electricity prices for mining
Cost inflation affecting the mining sector, average annual increase in costs, 2007 to 2012 (Source: StatsSA, CoM EAU)
Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
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Resolving the challenges in the mining sector
• Very strong level of commitment in MIGDETT by
industry, government and labour leadership to resolving the
challenges.
• MIGDETT Platinum Task Team looking at short term and long term
solutions to challenges faced by PGM mining sector
• Commission of enquiry into the Marikana tragedy.
• Signed a stability and peace accord with all the stakeholders in
the mining sector.
• PGM sector investigating move to collective engagement on
wages.
• Engaging all stakeholders including government, unions (including
AMCU), the investment community, local communities and other
parties.
The mining industry is making a positive contribution
• The industry is making significant progress on the Mining Charter
targets and is committed to “Placing South Africa First”.
• Industry is contributing significantly to community development
(R1.4 billion last year), but can make this more effective in terms
of better partnerships.
• Other role players have just as important role to play (such as
local government) in service delivery and community
development.
• Industry spent R4 billion on skills development and training
(excluding the skills levy).
• Average wages in mining lift the average for all workers (R89
billion paid in wages in 2011).
• R25.8 billion paid in corporate taxes in 2011.
• Industry is procuring significant % locally.
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Presentation outline
The Local Context
Unpacking the growth constraints
RSA Mining “Putting South Africa First”
Why Mining is Crucial to South Africa
Resolving the challenges
Recognising the industry’s potential
The Global Context
What is the mining sector doing to help resolve issues?.
• The Mining Company Leadership through the Chamber have agreed to
“Put South Africa First”
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What is the mining sector doing to help resolve issues?.
• Getting its house in order:
– Demonstrating positive role industry does play in economy and society.
– Upping game in areas where industry lags.
• Developing a positive contribution model:
– Improving effectiveness on issues such as community development through establishment of regional processes.
• Engaging with relevant movers and shakers on key issues:
– Mining industry’s potential contribution to the NDP
– Competitiveness
– Labour market stability
– Community investment
– Environmental taxation
– Improving SHEC performance
Conclusion
Mining matters for the growth, development and transformation of South Africa