Date: Feb 11, 2019
The industry contributed 7.3% or R356 billion (US$26.6 billion) to the country’s GDP, up from 6.8% in 2017, the council’s CEO Roger Baxter and chief economist Henk Langenhoven said Monday at a state of the mining nation media briefing at Mining Indaba.
Baxter noted the industry had achieved a growth rate of 1.2%, which was not high, but was higher than the national economy’s “disappointing” growth rate.
Mining also contributed R93 billion to fixed investment, which constituted 17% of private sector fixed investment and 10.5% of the country’s total fixed investment spending for the year.
The council noted there had been “virtually no growth (weighted average of 0.4%) in fixed investment in the sector during 2018, with substantial volatility in spending which reflects uncertain prospects due to commodity price fluctuations (internationally) and domestic policy uncertainty”.
It said it seemed as if fixed investment reached a lower turning point in 2016 and the decade average spending level in 2018.
During the year, the mining industry’s value of primary minerals sales was steady at R475 billion, although the value of commodity exports rose 1.6% year-on-year to R312 billion, making up 66% of the sector’s total production and 25% of the country’s R1.25 trillion export sales.
On the negative side, the rand strengthened 0.8% against the US dollar during the year, which adversely affecting rand receipts of exports, which decreased by 5%, while exports increased 2% on a US dollar equivalent basis.
The mining industry paid R22 billion in taxes, 16% higher year-on-year, and R7.6 billion in royalties, also 31% higher than 2017.
The sector’s input costs rose 6% in 2018, with Langenhoven citing industrial chemicals and petroleum costs as the main drivers of the increase. Meanwhile, rand commodity costs rose by 1.7%, which led to a “substantial negative differential” between the inflation of input costs and selling prices.
