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Mining raises South Africa’s economic revival hopes

South African president Cyril Ramaphosa
South African president Cyril Ramaphosa

JOHANNESBURG – SOUTH Africa is pinning its hopes on the resurgent mining sector to revive an economy ravaged by the effects of the ravaging coronavirus (COVID-19) pandemic.

Global metals prices have accelerated the revival of the sector, thereby contributing to the country recording another record trade surplus in May, to the value of R54,6 billion (US$3,8 billion)

This is according to South African Revenue Service (SARS), indicating the surplus is due to a 1,5 percent increase in exports between April and May

The trade surplus is primarily driven by mineral and precious metal exports as well as exports of vehicle and transport equipment, chemical products and agricultural products

President Cyril Ramaphosa said high commodity prices and rising global demand was good for the economy, particularly the mining sector.

“Rising global metals prices will play a significant role in accelerating our recovery from the pandemic downturn,” he stated in his weekly letter on Monday.

“In addition, they open up a host of new opportunities in the mining value chain, boosting the fortunes of the mines themselves and with them the suppliers of capital goods and the options for beneficiation.”

Mining has always been pivotal to the economy and society in South Africa.

Mining contributes over half of goods exports, around 10 percent of gross domestic product (GDP) and 5 percent of employment.

“It is a pillar of our capital goods industry. It is not a coincidence that when global metals prices peak, our economy and job creation also surge,” Ramaphosa stated.

He however bemoaned that mining had historically been central to South Africa’s deep inequalities with ownership concentrated in a few huge companies, while workplaces, pay-scales and communities around the mines are still shaped by discriminatory relationships established under apartheid.

“The challenge is to benefit from the mining boom while laying the groundwork for more diversified, inclusive and environmentally sustainable growth,” the president said.

Ramaphosa also said mining was vital to the economy for the foreseeable future.

“Let us grasp the opportunities that exist in this sector so that mining can help guide our path to a more inclusive and equitable economy,” Ramaphosa said.

– CAJ News

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