By Riches Soberekon
According to a recent report by PwC, South Africa experienced a decline of over $5 billion in mining profits during the last financial year. The report also raises concerns about the future viability of the country’s gold industry, suggesting that without renewed investment, it may have less than 30 years left.
These predictions are considered worst-case scenarios.
Although the net profits of 29 major mining companies in South Africa remained above pre-pandemic levels, they were nearly half of the peak profits of $10.8 billion recorded in 2021.
The report emphasizes the urgent need for the country to shift focus within its mining sector towards green energy metals and minerals such as copper, nickel, lithium, and cobalt.
The report does not specifically mention whether environmental concerns have contributed to the decline in investment.
However, there is a global call for greater action to combat climate change, and mining operations are known to account for a significant portion of global greenhouse gas emissions.
Mining plays a crucial role in South Africa’s economy, contributing nearly 60% of the country’s exports in the first half of 2023.
The reduced profits in the mining sector can be attributed to global drops in commodity prices following the COVID-19 pandemic, as well as local challenges such as currency fluctuations, high inflation, power blackouts, and logistical issues in exporting minerals due to deteriorating infrastructure.
It is important for South Africa to address these challenges and explore new opportunities in the mining sector to ensure sustainable economic growth.