{"id":54580,"date":"2023-10-05T14:23:50","date_gmt":"2023-10-05T14:23:50","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors"},"modified":"2023-10-05T14:40:45","modified_gmt":"2023-10-05T14:40:45","slug":"alarm-bells-over-one-of-south-africas-most-important-sectors","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors","title":{"rendered":"Alarm bells over one of South Africa\u2019s most important sectors"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Mining companies have seen a substantial drop in profits over the last year, which poses a serious problem for South Africa\u2019s tax collection.<\/p>\n

This is according to the latest PwC South Africa\u2019s 2023 SA Mine report, which looks at various factors negatively impacting the mining sector, including productivity and infrastructure constraints, decreases in the prices of certain minerals, and increases in input costs.<\/p>\n

\u201cThe amalgamation of these factors has resulted in a decrease in profits and operating cash flows experienced by South African mining companies,\u201d Andries Rossouw, PwC\u2019s Africa Energy, Utilities and Resources Leader, said.<\/p>\n

\u201cHowever, strong balance sheets have enabled miners to increase investment into operations and pay dividends.\u201d<\/p>\n

Rossouw added that the weakening of the rand did provide some relief to the lower dollar-mineral prices, but this was eroded by more costly imports and the prices for key inputs, including chemicals, materials<\/p>\n

and equipment.<\/p>\n

South African economy has been highly dependent on the mining sector, with data from the South African Revenue Service showing that 58% of South Africa\u2019s exports (R575 billion) were mined material exports in the first half of 2023.<\/p>\n

Rossouw noted that the sale of mined material is essential for the local economy, as inflows boost the nation\u2019s foreign reserve currencies.<\/p>\n

\u201cThe socio-economic environment in which mining companies operate in South Africa is often characterised by high levels of unemployment, low skills and poverty,\u201d he added.<\/p>\n

\u201cThe consequences of any challenges to mining could result in a dire situation for the nation\u2019s economy and security, including the social well-being of society.\u201d<\/p>\n

However, mining companies have faced several headwinds over the last year, including electricity constraints, logistical nightmares for bulk commodity exports, above-inflationary cost pressures, changes in commodity prices, widespread illegal mining and a shortage of critical skills.<\/p>\n

With these challenges in mind, there are concerns over how long South Africa can continue to rely on key commodities, such as gold, coal, iron ore and platinum group metals, as stocks decline.<\/p>\n

A lack of exploration and a lag between investment decisions could also hurt the long-term sustainability of the industry.<\/p>\n

However, there may be hope for the sector, as the push for global decarbonisation pushes demand up for South Africa\u2019s critical minerals.<\/p>\n

\u201cSouthern Africa has some of the critical metals needed, and it is important for the region to look at opportunities and take advantage of them,\u201d Vuyiswa Khutlang, PwC South Africa Energy, Utilities and Resources Partner, said.<\/p>\n

\u201cTo take advantage of these opportunities will require significant cooperation between public and private stakeholders.\u201d<\/p>\n

Looking positively, mining companies are increasing their investment for future operations, PwC\u2019s report notes.<\/p>\n

\u201cInvestment in the future of operations has increased, while continuing to return value to shareholders through dividends, even though profits have decreased,\u201d Khutlang said<\/p>\n

\u201cMiners have continued to invest in projects in South Africa, with the largest increase identified in capital spending on assets year on year, from 18% in 2022 to 37% in 2023.\u201d<\/p>\n

However, with the significant drop in platinum group metal and coal prices from record highs, there could be a limitations on investment.<\/p>\n

Tax importance<\/p>\n

A successful mining industry also benefits the South African economy, with declining profits hurting the nation\u2019s corporate tax collections.<\/p>\n

Following a peak of R31 billion in Q2 2022, tax from the mining sector has dropped massively to R12 billion in Q2 2023, Stats SA said.<\/p>\n

With this, company tax dropped from R77 billion near the end of 2021 to R49 billion in Q2 2023, with a massive shift in collections from the mining sector partially responsible for this.<\/p>\n

The statistic body said that the mining industry benefitted from the commodity boom following the end of the Covid-19 pandemic, with the glossy outlook impacting Treasury\u2019s expectations in the 2023 budget, which now looks to be far off the mark.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Mining companies have seen a substantial drop in profits over the last year, which poses a serious problem for South Africa\u2019s tax collection. This is according to the latest PwC South Africa\u2019s 2023 SA Mine report, which looks at various factors negatively impacting the mining sector, including productivity and infrastructure constraints, decreases […]<\/p>\n","protected":false},"author":84,"featured_media":54578,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-54580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nAlarm bells over one of South Africa\u2019s most important sectors - South Africa<\/title>\n<meta name=\"description\" content=\"Mining companies have seen a substantial drop in profits over the last year, which poses a serious problem for South Afr ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Alarm bells over one of South Africa\u2019s most important sectors\" \/>\n<meta property=\"og:description\" content=\"Mining companies have seen a substantial drop in profits over the last year, which poses a serious problem for South Afr ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-05T14:23:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-05T14:40:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1696504142.416128.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Alarm bells over one of South Africa\u2019s most important sectors\",\"datePublished\":\"2023-10-05T14:23:50+00:00\",\"dateModified\":\"2023-10-05T14:40:45+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\"},\"wordCount\":649,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1696504142.416128.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/alarm-bells-over-one-of-south-africas-most-important-sectors\",\"name\":\"Alarm bells over one of South Africa\u2019s most important sectors - 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