Mineral resources and energy minister Gwede Mantashe says the mining industry remains a strong pillar of SA’s economy.
“The mining industry contributes meaningfully to gross domestic product (GDP). While production declined, the value of production registered R1.18-trillion in 2022, up from R1.1-trillion in 2021 on the back of strong global demand,” he said.
He said the sector created 23,552 jobs between December 2021 and December 2022, resulting in the overall employment of 472,088 workers.
Mantashe was tabling his department’s budget vote to parliament on Tuesday. The budget for the 2023/2024 financial year is R10.7bn.
According to the SA Revenue Service (Sars), the mining sector contributed R89bn in corporate tax in the 2021/22 financial year, he said. A further contribution of mining to the country’s revenue through royalties stood at R28.45bn in the same period, keeping its percentage contribution to GDP at 7.53%.
“This is a clear indication that mining remains a strong pillar of our economy.”
Mantashe said, as highlighted in the latest Fraser Institute survey that placed SA in its worst position in recent memory, mining would contribute even better to the economy if the binding constraints in electricity (load-shedding), rail, and bottlenecks in the port systems were urgently resolved.
According to the Fraser Institute survey, SA is in the bottom quartile on the “investment attractiveness” index.
“Our view is we had issues last year, we have no issues now because we know that load-shedding is a reality, rail and port bottlenecks are a reality and therefore the attractiveness is required to address those weaknesses,” he said.
One of the indices highlighted in the survey is the transparency of licensing systems.
Mantashe said that, to this end, they have in collaboration with the State Information Technology Agency (Sita) initiated a procurement process for a licensing system with integrity. The bid adjudication process is under way and will be finalised by July.
Mining and energy have also seen some tail winds, with sizeable investments. To this end, the department is following on the implementation of 56 investment commitments which were pledged to the mining and energy sectors at the annual investment conferences, amounting to R397bn. Among them are:
5bn from De Beers for Venetia Mine
R6bn from Exxaro into Grootegeluk
R636m from Impala Platinum at the Two Rivers operation; and
R175m for the Steelpoortdrift vanadium project.
He said these pledged investments reinforced the assertion that mining was a sunrise industry ready to bolster SA’s economy for years to come.
On the energy sector, the lifting of the threshold on embedded generation has unleashed green shoots, he said.
For example:
A Goldfields investment in a 50MW photovoltaic (PV) plant at its South Deep Mine with an investment of R715m. This power plant can supply the mine and the potential excess power ready to be sold to the grid, thus creating the “prosumer” market which will help close the supply and demand gap in the electricity market.
The Seriti-Green R4bn commitment of a 155MW wind energy facility. This is a clear demonstration that targeted interventions are beginning to deliver green shoots in addressing the electricity shortages.
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