6 years ago

South African Business 2017 edition

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  • Development
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  • Johannesburg
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South African Business is a unique guide to business and investment in South Africa. In addition to an up-to-date economic overview of the country, analyses of the main industrial sectors, plus profiles of the nine provincial economies, the 2017 edition of South African Business includes special features on key topical issues such as skills development and education, renewable energy and the REIPPPP programme, and trade with Africa.


OVERVIEW Mining South Africa has vast mineral reserves and excellent infrastructure. South Africa has huge reserves of platinum and chrome and produces about 40% of the world’s vanadium and vermiculite. The country has large reserves of ilmenite, palladium, rutile and zirconium and 80% of the world’s known manganese reserves are located in the Northern Cape Province. South Africa no longer enjoys world dominance in gold production – both China and the US produce more ounces – but it does produce 75% of the world’s platinum and 73% of its chrome. Coal and platinum group metals (PGMs) have overtaken gold as the minerals generating the biggest sales volumes. Coal, iron ore, gold and platinum group metals (PGMs) collectively make up 80% of South Africa's mineral sales. South Africa is the second-largest exporter of steam coal in the world and is the number-one producer of andalusite. The Witbank coal fields of Mpumalanga are the most productive in Africa and the province lies at the southern end of the eastern limb of the Bushveld Igneous Complex. With mines in Mpumalanga reaching the end of SECTOR INSIGHT The iconic Anglo American has announced that it will, in future, only focus on three minerals. their lives, the coal reserves of the Waterberg region in Limpopo are attracting attention. The ferroalloy industry is centred on the town of Middelburg. Nkomati Mine is South Africa's only purenickel operation. After a very tough period for gold producers, the recovery of SOUTH AFRICAN BUSINESS 2017 56

OVERVIEW the gold price to above 300 per ounce in late 2016 came as a great relief. Various international crises, including Britain's vote to leave the European Union, saw a return to gold by investors seeking a safe haven. Although the general trend in production volumes of gold in South Africa is downwards, there are some very profitable mines and newcomer Sibanye Gold (spun off from Gold Fields Ltd in 2012) has been buying up gold and platinum mines. Mines in Aggeneys in Namaqualand are responsible for approximately 93% of South Africa’s lead production and 12% of all world lead exports. There are 20 chromite mines in North West Province located along a reef running from Brits to Rustenburg and serviced by several ferrochrome smelters. With the Chinese economy slowing down, the demand for the main component of steel has dropped to the point where iron-ore projects in the Northern Cape have had to lay off significant numbers of workers. A new ironore sampling plant at Saldanha in the Western Cape, a joint venture between Kumba and Transnet, allows exporters to certify the quality of their product before the ore is loaded onto ships for export. The Northern Cape produces more than 84% of South Africa’s iron ore. The Kalahari Basin contains 80% of the world’s manganese reserve, but only 15% of global production comes from this area so there is enormous scope for development. Several new blackowned manganese projects are underway. Zinc seldom features in reports, but when Vedanta started work in 2015 on its R9.4-billion Gamsberg Zinc project, it was very big news indeed for a sector in need of good news. The new mine is near to Vedanta's existing Black Mountain mine in the Northern Cape Province. Every year Cape Town hosts the Investing in African Mining Indaba, the world’s largest gathering of the most influential stakeholders in the African mining industry. More than 7 000 leading financers, investors, mining professionals and government officials meet at the Indaba to network and broker deals. Trends One of the most significant changes in the South African mining landscape was announced in early 2016, when the global resources giant Anglo American, whose history is irrevocably linked with the rise of South Africa as an industrial nation, announced that it will focus on only three minerals: copper, platinum and diamonds. This means that a large number of coal, manganese and platinum assets, which for many decades resided in the Anglo American stable, are now on the market. Anglo's 69.7% share of Kumba Iron Ore may be sold as one asset or portioned off to different buyers. The company has announced that it wants to sell all its coal mines. Anglo's selling strategy dovetails nicely with the ambitions of relative newcomer Sibanye Gold. Sibanye Gold was created when four mines in the Free State and West Rand and some service companies were hived off from Gold Fields Ltd. Gold Fields retained the South Deep mine as its only South African asset: it also has mines in South America, West Africa and Australasia. 57 SOUTH AFRICAN BUSINESS 2017

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