If ever you thought the downturn in the mining sector was only a myth, the Chamber of Mines disputes that notion.
A cocktail of factors have driven almost half of members of the South Africa’s Chamber of Mines, which are the country’s largest mining companies, into the dreaded loss-making zone, says the Chamber of Mines in its 2015 Annual Report.
According to the organisation, this is due to two factors – both domestic and international. Internationally, something which is entirely out of South Africa’s control is low commodity prices. Domestically, climbing costs, falling productivity and regulatory issues, which analysts regard as self-inflicted, have added insult to injury.
To cope with the situation, mining companies are reducing their operating costs by amongst other measures selling non-performing asset, reducing their employee complement and shelving the implementation of greenfield and brownfield projects. While pursing these objectives, they are contending with threats of strikes by their unionised employees.
The performance of the largest mining companies like AngloGold Ashanti, Sibanye Gold and Impala Platinum Holdings is usually the barometer of the state of South Africa’s mining sector.