South African miners ‘almost unscathed’ by Covid-19 pandemic, PwC report says

JOHANNESBURG - The local mining industry has weathered the Covid-19 pandemic better than other sectors, according to a mining report released on Tuesday which highlighted the bullish impact of stronger commodity prices and a weaker rand on the key sector.

According to the 2020 PwC SA Mine report, the favourable market conditions pushed the total market capitalisation of companies by 52 percent to R1.2 trillion, cushioning the sector from the devastating impact of the global pandemic which affected other sectors.

Although local mining houses operated at lower capacity as a result of the national lockdown, the platinum basket price rally supported growth as gold reached record highs in the early months of the years, with investors turning to the metal amid Covid-19 jitters and global trade tensions.

The gold price has gained 14.9 percent in six months, currently trading at $1910.64, while platinum was 18.6 percent up, in the same period.

The total revenue generated by the South African mining industry for the year ended 30

June 2020 grew by four percent. This was mainly driven by Platinum Group Metals (PGMs), gold and iron ore, which saw increases in revenue for the 12-month period, the report said.

“The mining industry weathered the Covid-19 storm, mostly unscathed, and certainly better than many other sectors,” according to the report.

PGMs generated the largest portion of revenue at 28 percent, in what is a 56 percent increase from the previous year, overtaking coal for the first time since 2010.

“The long-term future is unknown however as there is little consensus on how the pandemic will impact the mining industry. The pandemic highlighted the absolute need to build back better and Mining will play a key role in that recovery,” said Andries Rossouw, PwC Africa Energy Utilities and Resources Leader.

– FIN24.