Business Maverick

Mining Facts and Figures

SA mineral exports could be R150bn higher if rail network reached potential: minerals council 

SA mineral exports could be R150bn higher if rail network reached potential: minerals council 
Mine workers operate drilling machinery underground at the Gold Fields Ltd. South Deep gold mine in Westonaria, South Africa, on 12 October 2022. (Photo: Michele Spatari / Bloomberg via Getty Images)

The Minerals Council South Africa, the main umbrella group for the mining sector, said on Monday at the launch of its annual ‘Facts and Figures’ document that Transnet’s woes in 2022 cost the sector an estimated R50-billion in lost exports. And if the rail network operated at its full capacity, South Africa’s bulk mineral  exports could be R151-billion more annually. 

The minerals council launched its annual “Facts and Figures” document at the start of the Investing in African Mining Indaba in Cape Town. 

Let’s start with the bad news and then move on to the good stuff. 

“The Minerals Council estimates the opportunity cost resulting from rail and port constraints to have increased to R50-billion in 2022 from R35-billion the year before when delivered tonnages are measured against targeted tonnages. If the rail network was operating at nameplate capacity, with a few minor enhancements, South Africa would realise R151-billion more in bulk mineral sales,” the council said. 

   “Once again, the mining industry has shot out the lights when considering its financial performance and contribution to the economy in 2022. However, we remain concerned about the worsening constraints in rail and port logistics, which means we have yet again forfeited the benefits of high commodity prices and demand, as well as inadequate electricity supply,” council CEO Roger Baxter said.

The opportunities lost because of state failure were thrown into sharp relief by the good news. 

In an economy with an unemployment rate that is effectively well north of 40%, the mining sector actually created jobs in 2022, employing 475,551 people compared with almost 459,000 in 2021. Those employees were paid R175-billion compared with R166-billion in 2021.

The industry paid R74-billion in taxes last year, a bit less than the R81-billion it paid in 2021. But that was still a lifeline to Treasury and in the broader scheme of things could, say, have paid for the sponsorship of 74 foreign football clubs. 

South African mining companies exported R878-billion worth of minerals last year, up from R856-billion in 2021. That total could have been R938-billion, or 5.5% higher, were it not for Transnet’s wobbles. 

And the sector had its best safety year yet, with a record low of 49 miners killed on the job in 2022.

That toll is going the right way, but the economic toll of state failure is mounting. DM/BM

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