Jambo Africa Online’s Senior Editorial Correspondent, FRANCOIS FOUCHE, puts together a collage of news titbits on economic developments impacting on Africa…
Four key facts about the South African Mining Industry you did not know.
Fascinating mining industry results from the latest mining industry census (conducted in 2019), which provides detailed statistics on mineral production, finances, employment, and exports and imports.
The same mining census was conducted previously in 2012 and 2015.
Coal dominates production
South African coal production amounted to 306 million metric tons in 2019.
The graphic below illustrates production (in metric tons) of various minerals.
Each block in the graphic represents about 407 000 metric tons (roughly the weight of 2 710 blue whales).
Coal covers about 75% of the total mass of all minerals produced.
The second biggest mineral was iron ore, followed by chromium and manganese ore.
Notice the tiny portion of the block on the lower left side of the graphic.
This includes all other minerals, including nickel (63 379 metric tons), copper (56 534 metric tons), platinum (138 metric tons), gold (97 metric tons) and other smaller commodities.
Employment has increased, but not for mine employees
Extracting and processing these minerals require a great deal of machinery and manpower.
The local mining industry employed 514 859 individuals in 2019.
If the mining sector was represented by a group of 100 workers:
– 39 would be employed in the platinum group metals sector,
– 21 in the coal sector,
– 20 in the gold sector,
– the iron ore sector is a much smaller recruiter, employing 5 of every 100 employees.
– the remaining 15 employees work across smaller operations, which include the production of other minerals, lime works and stone quarrying.
The mining workforce expanded by 3,737 individuals in the 2015–2019 period.
A closer look shows that this increase in employment was due to a rise in the number of employees from subcontractors and labour brokers.
The number of capital employees – individuals working on projects that fall outside the daily scope of business – also increased over this period.
However, there was a notable decline in the number of workers employed directly by mines.
Mine employees decreased by 22 622 individuals.
If we focus squarely on these jobs, the bulk were lost in the coal & lignite sector, followed by platinum group metals and gold and uranium.
On a provincial level, the mining industry recorded employment decreases in North West, Mpumalanga, and KwaZulu-Natal in 2019 compared with 2015.
North West, Limpopo and Mpumalanga have the largest mining workforces.
Not surprising, as mining is the largest industry in all 3 provinces, according to provincial GDP estimates.
Palladium and rhodium record large sales increases
Platinum group metals had, for the first time in a decade, overtaken coal as the most significant contributor to total mining sales.
This is largely due to the rise in the prices of palladium and rhodium, which pushed up sales.
The value of palladium sales increased by R23,4 billion and rhodium by R15,7 billion in 2019 compared with 2015.
Interestingly, the data show that South Africa is producing less palladium and rhodium than it did in 2015, showing the extent to which prices have driven sales growth.
Almost two-thirds of mining sales are from abroad
The industry generated R527,5 billion in total sales in 2019, with 61% (R323,8 billion) sourced from outside the country.
Breaking this down by commodity, export sales dominated the manganese ore market (96%), while 61% of coal sales were local.
For more info on the local mining industry, click here.
The world is concerned about climate change. Africa stands to benefit
In the run up to the COP26 international climate talks, which begin Oct. 31 in Glasgow, African countries are positioning themselves to attract so-called green finance.
In a few days, South Africa will receive a delegation from the U.S., U.K., Germany and France to discuss funding the gradual closure of some of the country’s coal-fired power plants.
Our deputy finance minister earlier suggested that $15 billion of national debt be forgiven in exchange for phasing out coal.
AFC Capital this week announced plans to raise $2 billion for climate-resilient infrastructure on the continent.
Gabon passed a law that will allow it to trade carbon credits generated from preserving its forests and a Kenya geothermal-power utility plans to sell credits it accumulated over the past 18 months.
Africa is a rich hunting ground for those looking for climate-related finance opportunities.
Coal-reliant countries like South Africa need money to transition.
At the same time, the Congo Basin, which spans much of central Africa including Gabon, is the world’s second-biggest natural carbon store after the Amazon, providing ample opportunities to generate carbon credits.
With extreme weather events around the world, from hurricanes to wildfires, raising awareness about global warming, now is the time for Africa to tap into green finance.
Our Environment Minister Barbara Creecy wants COP26 to set an annual target of $750 billion to help poor countries transition to clean energy and protect themselves against climate change. It’s almost 8x more than the current goal that’s never been met.
The *United Nations* General Assembly taking place in New York this week is running under the theme _”Building resilience through hope – to recover from Covid-19, rebuild sustainably, respond to the needs of the planet, respect the rights of people, and revitalize the United Nations”_.
Pertaining to the _’needs of the planet’_ element, Xi Jinping has announced that *China* will not build more new coal power plants abroad in a move which could prove key in reducing global emissions.
Speaking in his address, Xi said: _”China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad”_.
Further details have not yet emerged but would potentially lead to the country ceasing its investment in *foreign coal power plant projects* as previously implemented largely under the banner of (China’s Belt and Road Initiative*.
As this infographic using Global Energy Monitor data shows, China has been especially active in Indonesia where $15,671m worth of coal power projects have been financed, equating to total plant capacity of 9,724 megawatts.
Investment hasn’t been limited to developing economies however, with the UK’s Drax Coal Power Plant receiving $36m in financing from the Industrial and Commercial Bank of China in 2015, as well as the $200m refinancing of the United States’ Sandy Creek power plant in 2013.