South African mining returns to profitability, despite challenging environment – PwC

BY: Simone Liedtke | Mining Weekly

JOHANNESBURG (miningweekly.com) – The South African mining industry returned to profitability this year, despite a challenging operating environment owing to regulatory uncertainty, energy constraints, labour disputes, illegal mining activities and a skills shortage, PwC’s eleventh ‘SA Mine’ edition, published on Thursday, shows.

PwC Africa energy utilities and resources leader Andries Rossouw said during a briefing on Thursday that the industry’s good performance during the year was in spite of the speed of technological advancement, climate change, sustainable operations and the changing of consumer behaviour defining some of the industry’s key risks.

While these should be “top of mind” for mining companies, he added that operating performance, investor sentiment and the global attractiveness of the industry continued to erode, with investors questioning whether the industry can create sustainable value for its stakeholders.

Because of this, Rossouw urged miners to “find a balance between stakeholder needs and long-term sustainable operations in their capital allocation decisions”.

He said that, in order to restore faith in a challenged industry, mining leaders would need to show that they were at the forefront of creating sustainable value for all stakeholders.

“By aligning financial and sustainable strategies to prioritise green-, customer- and community-focused strategies, further enabled by technology, [the industry] will help build a long-term vision of growth, access, equality, innovation and trust.”

PwC’s report, meanwhile, highlights that, in 2019, South African miners’ total market capitalisation increased to R884-billion, well above the R482-billion market capitalisation of the prior year.

This was mainly owing to the increase in market capitalisation of companies within the platinum-group metals (PGMs) and gold sectors…Full Story