The Minerals Council of South Africa gave a cautious guidance on the outlook of mining in 2023 and onwards this morning at a press briefing hosted at the Standard Bank Groups stand at the ongoing Mining Indaba in Cape Town.
The Council is mandated to advise Samson Gwede Mantashe, the Minister of Mineral Resources and Energy, on occupational health and safety at mines, develop legislation, conduct research, and liaise with other statutory bodies.
During the Minister’s opening remarks during the commencement session of the Indaba, Honorable Gwede echoed the sentiments of the Council when he stated that “the year 2022 had been a difficult year for the World and Africa in particular. It is a year in which international and domestic factors negatively affected mining production and mineral sales. International factors included soaring energy prices due to the ongoing geopolitical dynamics, whereas domestic factors included the ongoing power supply disruptions (loadshedding) and the logistical bottlenecks on our railways and ports.”
These statements from both Minister and the Council are evident in the production figures which ultimately impact contribution to the national treasury. “It is estimated that loadshedding costed the economy about R1 billion a day. In November 2022, mining production contracted by 09% marking a 10th consecutive month of contraction in volumes produced”, the Minister further stated.
However, the Minister also indicated that there was a silver lining. “However, in the same period, Gold Fields – a mining company operating in South Africa – increased production by 10%.”
Furthermore, he attributed the progress was in light of legislative changes in the energy sector.” It is our considered view that Gold Field’s performance was in part because of the reforms on embedded generation which they took advantage of following the amendments to Schedule 2 of the Electricity Regulation Act (ERA) wherein the licensing requirement for generation projects for own use was increased from 1 megawatt to 100 megawatts, and ultimately removed altogether”.