Like the lonely child on the playground, SA was forced to sit on the sidelines and watch as the rest of the world made the most of record high commodity prices in 2021. Locally, stockpiles of valuable key commodities were left stranded at mines, unable to reach awaiting ships for export.
This inability of mines to capitalise on bullish global markets has been laid at the feet of those entrusted with managing SA’s infrastructure. The country’s well-documented rail and port bottlenecks stem from high levels of theft and vandalism, as well as other operational challenges at Transnet. The state-owned utility has been crippled by corruption linked to state capture, the extent of which has been exposed in part 2 of the Zondo inquiry report, released in early February.
The rate mining companies are charged for rail services was also flagged as a major contributor to SA having become increasingly uncompetitive in the quest for global market share. As mining companies are not the owners or operators of the rail services, they are left at the mercy of Transnet and find it difficult to influence the freight logistics group to be more productive, innovative or to introduce better technology.
Mining provides the single greatest part of SA’s export revenues and employs, directly and indirectly, more people than any other sector. The Minerals Council reports that in 2020 mining added about 8%, or nearly R372bn, to the country’s GDP. These numbers could be considerably improved upon if security and infrastructure challenges were effectively dealt with.
The bottom line is that SA has vast mineral resources, but unless the country manages to draw investment in, exploration and mining its minerals will remain as dirt in the ground, neither benefiting the economy, nor the millions of South Africans so desperate for the continued stimulus and opportunities mining has historically been so central in providing.
Source: News Formal (newsformal.com)
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