The Mining Sector

An Expert's View about Mining and Quarrying in South Africa

Posted on: 24 Oct 2012

South Africa’s mining sector contributes £25 billion annually to the economy, accounts for nearly one third of total exports and employs over 500,000 people

The Mining Sector in South Africa South Africa is estimated to have the world’s fifth largest mining sector in terms of GDP South Africa’s mining sector contributes £25 billion annually to the economy, accounts for nearly one third of total exports and employs over 500,000 people Market overview ξ South Africa is estimated to have the world’s fifth largest mining sector in terms of GDP ξ South Africa’s mining sector contributes £25 billion annually to the economy, accounts for nearly one third of total exports and employs over 500,000 people ξ South Africa’s total resources reserves remains some of the world’s most valuable, with an estimated worth of £1,5 Trillion ξ Infrastructure plays a central role in the South African Government's development agenda with a four year capital expenditure programme of £90 billion ξ South Africa is the economic powerhouse of Africa, contributing more than 40% of all industrial output and accounting for 50% of the continent’s spending power ξ South Africa is one of the most geologically blessed countries in the world and is best known for its deposits of gold, diamond and platinum riches but also has vast reserves of Platinum Group Metals (PGM’s), chrome, manganese, nickel, iron ore and coal. ξ Apart from its prolific mineral reserves, South Africa’s strengths include a high level of technical and production expertise and comprehensive research and development activities. ξ South Africa is the third largest coal producer and fourth largest gold producer in the world. In 2009 it was estimated that South Africa held 87% of the world’s Platinum Group Metals reserves. ξ South Africa’s reserves are well mapped and exploration activities are limited with mining companies focussing on existing mines. The industry is dominated by large companies and half of the world’s leading mining companies have operations in South Africa. ξ The country has consistently failed to invest in the infrastructure required to maximise the benefit from its resources. The government parastatal, Transnet, is now making a massive infrastructure investment of £22 billion in the rail and port sectors which should help to ease some of the bottlenecks in the mining sector. ξ A persistent debate over nationalisation of the mines continues to fuel international investor uncertainty in the sector. The government has insisted that nationalisation is not its policy however the seeming inability of the South African Government to address issues of inequality, poverty and unemployment mean that nationalisation remains an emotive issue. Key opportunities ξ Supply of Hi-Tech or Specialised Equipment or Machinery ξ Acid Mine Drainage Solutions ξ Education, Training and Skills ξ Health & Safety ξ Beneficiation has been identified as a key opportunity area for growth, an idea supported by the South African Government. A beneficiation strategy was published in June 2011 however concerns remain about the inadequate supporting infrastructure and power supply required to deliver beneficiation activities. Latest export opportunities in the Mining sector Latest export opportunities in South Africa Getting into the market Much of South Africa’s legal, economic and business practices and legislation is based on the UK equivalents. This makes operating in South Africa less problematic and alien than in other international markets. Regulatory standards also tend to mirror EU equivalents and the cultural and historical links are broadly positive in the UK’s favour. In return, the UK receives 4 out of every 5 South African investment projects in Europe. South Africa does operate a policy of Broad Based Black Economic Empowerment to redress the imbalances to black employment under the apartheid regime. More about doing business in South Africa Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in South Africa or contact your local international trade team. ξ Melissa Else, Trade & Investment Adviser – Advanced Engineering & Education UKTI Johannesburg, +27 (0)11 537 7205 , E: melissa.else@fco.gov.uk ξ Jonathan Giliam, Trade & Investment Adviser – Infrastructure & Energy UKTI Johannesburg, +27 (0)11 537 7225 , E: jonathan.giliam@fco.gov.uk Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Mining sector Latest events in South Africa Major Events Mining Indaba Date: 4 - 7 February 2013 Website: www.miningindaba.com/ Electra Mining September 2013 Website: www.electramining.co.za/ Useful links More about OMIS and other UKTI services for exporters
Posted: 24 October 2012

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