Loading...
See More

SA mining industry faces leaner times

Nov 21 2012 13:50 I-Net Bridge

Related Articles

Mine strikes cost SA R10bn

'Dark days' loom for SA mining

Shabangu: Mining needs research

Coal firms sign wage deal

DA seeks mining unrest committee

Zuma unhappy over miner salaries

 
Johannesburg - A tough year for the mining industry lies ahead in the wake of recent industrial action‚ mounting cost pressure and shrinking profit margins‚ according to a report issued on Wednesday by professional services firm PwC.

While the 2009-2011 period was characterised by a recovery in overall commodity prices from the lows of the 2008 financial crisis‚ 2012 saw a slowdown in this recovery with gold the only commodity gaining value.

A weakening rand over the period managed to shield the South African mining industry from the decline‚ with prices remaining relatively flat. However‚ flat prices will not support the industry’s significantly increase cost base.

Hein Boegman‚ PwC African Mining Leader‚ said: “Generally balance sheets in the mining industry remained strong for 2012 with stable liquidity. However‚ the significant margin pressure will result in a challenging 2013.”

The 2012 financial year saw the country’s top 39 mining companies shed all the gains made since the 2008 financial crisis. Market capitalisation for the top 39 declined by 9% from R910bn in 2011 to R833bn in 2012‚ reflecting a 3% decrease in market capitalisation of R862bn in 2010.

On the back of strike action‚ the position weakened even further and reflected a market capitalisation of only R792bn at the end of September 2012.

“The tragic events at Marikana and widespread labour disputes have had a significant effect on the mining industry‚” said Boegman. “This has caused mining companies to rethink risk and the risk landscape they operate in. It is imperative now that they evolve their risk assessment practices to be more predictive in anticipating and planning for future potential risk events‚” said Boegman.

Although these events were not the only factors that affected market capitalisation‚ they played a key role in the decline of the top 39’s market capitalisation by 5% from June 2012 to September 2012. Of the top 10 companies‚ six posted declines with Anglo Platinum‚ Kumba Iron Ore and Exxaro Resources collectively losing R40bn in market value.
pwc  |  mining industry  |  mining unrest
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

3 sports games you have to watch this weekend

Whether it’s date night or a braai with buddies, plan around these three exciting sporting games!

 
 

Men24.com

Everyday struggles of naturally skinny guys
And this year's Miss Bumbum title goes to...
How to maintain your mo, bro
Hottie of the day: Colette

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...