Re­port­ing pro­vides trans­parency

The Star Early Edition - - COMPANIES - Joseph Booy­sen

THE LASTEST KPMG Min­ing Re­port­ing Sur­vey looks at how the African min­ing in­dus­try, faced with sig­nif­i­cant un­cer­tainty, volatil­ity and pres­sure for cost con­tain­ment has given rise to a num­ber of re­port­ing trends to pro­vide share­hold­ers with more trans­parency.

The sur­vey is a bi-an­nual pub­li­ca­tion that looks at re­port­ing trends in the min­ing in­dus­try as well as com­mon busi­ness prac­tices and also presents an anal­y­sis of the re­port­ing of 25 in­dus­try-lead­ing global min­ing firms.

Trends

Against the back­drop that the evolv­ing busi­ness en­vi­ron­ment faced by the min­ing in­dus­try over sev­eral years has had a sig­nif­i­cant im­pact on re­port­ing in the sec­tor, the re­port looks at com­mon trends within the in­dus­try as well as spe­cific ex­am­ples of how in­dus­try-lead­ing firms are treat­ing as­pects of re­port­ing.

Jac­ques Eras­mus, the global head of min­ing for KPMG in South Africa, said the sur­vey fo­cused on es­ti­mates and judg­ments, val­u­a­tion, non-Gaap (in­cludes earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and autho­ri­sa­tion) mea­sures, risks and other re­port­ing trends.

“With all of that in mind, dis­clo­sures in these ar­eas are be­com­ing in­creas­ingly preva­lent, as com­pa­nies try to pro­vide stake­hold­ers with dis­clo­sure of the ‘crit­i­cal judg­ments’ and es­ti­mates man­age­ment is re­quired to make.”

Dis­clo­sures in these ar­eas are be­com­ing in­creas­ingly preva­lent

Bruce Bick­in­son, the head of min­ing sec­tor at Web­ber Wentzel, said from the global per­spec­tive there was a pos­i­tive uptick, how­ever, from a South African view there was still a lot of un­cer­tainty fac­ing the sec­tor.

He said the en­emy was un­cer­tainty in South Africa and with the coun­try faced with fac­tors such as unem­ploy­ment and is­sues around gov­ern­ment poli­cies the coun­try was see­ing re­duced in­vest­ment in the min­ing sec­tor cur­rently, al­though South Africa’s neigh­bour­ing coun­tries are see­ing a fair amount of ac­tiv­ity.

Char­mane Rus­sell, a spokesper­son for the Cham­ber of Mines of South Africa, said min­ing re­mained a fun­da­men­tal eco­nomic pil­lar for South Africa and con­tin­ued to con­trib­ute to the coun­try’s so­cio-eco­nomic de­vel­op­ment.

Rus­sell said in 2015 min­ing con­trib­uted R286 bil­lion to gross do­mes­tic prod­uct, sold met­als and min­er­als worth R343bn, paid taxes and roy­al­ties amount­ing to R16.2bn, em­ployed around 460 000 peo­ple di­rectly and 1.4 mil­lion in­di­rectly and di­rect em­ploy­ees earned R116.7bn.

Pres­sure

How­ever, she said the South African min­ing in­dus­try con­tin­ued to be un­der pres­sure.

Rus­sell said South Africa is blessed with sig­nif­i­cant min­eral wealth and had an es­tab­lished and so­phis­ti­cated min­ing in­dus­try in place and these fac­tors meant that it would re­main an im­por­tant in­vest­ment des­ti­na­tion and had the po­ten­tial for fur­ther growth.

“Pol­icy cer­tainty is key for the South African min­ing in­dus­try,” Rus­sell said.

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