As with all miners globally, SA has not escaped the challenge of China’s lower economic growth prospects that have translated into reduced demand for mined products from our shores and elsewhere. However, the country’s mining sector still offers unique investment opportunities.

Our mineral reserves make up some of the world’s most valuable. Together these amount to an estimated R2.5 trillion while the sector is the fifth largest worldwide in terms of its contribution of 8.6% to GDP. Taking into account mining’s indirect contribution to the economy through backward and forward linkages, its contribution to GDP rises by 10% – to 18.6% – as it also supports some 500 000 jobs in associated industries.

SA is the world’s biggest producer of platinum and has the largest reserves of platinum group metals and manganese in the world. It also has among the largest reserves of gold, diamonds, iron ore, chromate ore and vanadium.

The country’s economy was built on gold and diamond mining, which began almost 150 years ago. Today listed miners on the JSE are key players on the global front. Basic resources companies account for around 18% of the market capitalisation of the JSE, which is R11.4 trillion. In 2014, mining companies raised more than $1.3 billion in capital on the bourse.

While the major miners are currently not on the same expansion drive as in previous years, these companies have become very focused on streamlining their operations, thereby becoming more attractive to investors. The SA government is also well on its way to creating a favourable environment for junior miners and smaller companies to play a more meaningful role in the extraction of resources. Last year saw two such miners – Tharisa and Oakbay Resources & Energy – list on our exchange. This proves that the JSE is the best way to open up new horizons in industrial commodities for big and small companies alike.

SA’s new Minister of Mineral Resources Ngoako Ramatlhodi has stated that he wants to restore the country’s mining industry to its former glory. ‘We are encouraging investors to invest in our country, as we have some of the largest global deposits of certain metals and minerals,’ he said.

We couldn’t agree more. The exchange was founded over a century ago because of the funding needs of the mining industry and we are still contributing to this demand. SA mining continues to have a crucial role to play in our country’s development and we are proud to be part of the industry’s future.

Donna Oosthuyse
Director: Capital Markets, JSE

January 2015
Image: Hanlie Huisamen