Not the ‘new gold’

Min­ing still the big­gest

Finweek English Edition - - Economic trends & analysis - GARTH THE­UNIS­SEN

MUCH HAS BEEN SAID ABOUT the au­to­mo­tive in­dus­try be­ing SA’s “new gold”, yet the in­dus­try con­trib­utes nowhere near as much to the econ­omy as the riches we dig from the ground.

Al­though min­ing as a whole ac­counts for around 6% of GDP com­pared to roughly 7% of GDP for the au­to­mo­tive sec­tor, the for­mer is still a much larger earner of for­eign ex­change.

For ex­am­ple, pre­cious met­als ac­counted for 26,9% of SA’s to­tal ex­ports last year and raked in R109bn for the econ­omy. Sim­i­larly, base met­als ac­counted for 17% of to­tal ex­ports with earn­ings of R68bn while min­eral prod­ucts, mainly coal, ac­counted for 13,8% of to­tal ex­ports and earned R56,8bn. By con­trast, trans­port equip­ment ex­ports ac­counted for just 9,6% of ex­ports and earned R38bn com­pared to trans­port equip­ment im­ports to­talling R52bn. That leaves a trade deficit of R14bn for the sec­tor.

What’s more, ac­cord­ing to the DTI the av­er­age lo­cal con­tent of ex­ported ve­hi­cles was just 39% last year, marginally bet­ter than the 37% fig­ure for the pre­ced­ing two years. That takes some of the gloss off of to­tal ag­gre­gate ve­hi­cle ex­ports, which to­talled 179 859 in 2006.

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