Mining should have raised South Africa’s GDP annual growth rate by 1% if it had grown at the same rate as its peers, says Mark Cutifani.
JOHANNESBURG, SOUTH AFRICA – Mining should have raised SA GDP annual growth rate by 1% if we had grown at the same rate as our mining peers, Anglo American CEO Mark Cutifani said on Thursday at the Fourth Enterprise Development Conference in Midrand.
“If mining had grown over the last seven years like our peers, instead of contracting, we would be heading the country towards the 5,4% growth target of the National Development Plan (NDP). A growing mining industry will be vital in creating an environment for sustainable employment growth and rising living standards, inclusive economic development and improving the country’s competitiveness. Mining has been, and remains, the bedrock of the South African economy, but we want to make it once again the engine of the South African economy,” he said.
Real value added in the mining sector peaked in 2005 on an annual basis, but then dropped by 9.8% in the subsequent seven years. In the second quarter 2013 it contracted by 5.6% compared with the first quarter on seasonally adjusted annualised basis. The non-mining South African economy by contrast grew by 26.9% between 2005 and 2012.
“The NDP, which has been embraced by almost all sectors of society, makes significant recommendations to grow the economy in a structured and integrated manner, with achievable targets of eliminating poverty and reducing inequality. The ultimate goal of the NDP is to reduce unemployment to 14% by 2020 and to 6% by 2030. This means 11 million jobs will need to be created and an economic growth rate of 5.4% per year needs to be achieved,” he said.
Recent research produced by the Chamber of Mines indicated that the mining industry employed some 525,000 people, with another 841,000 people employed indirectly in supplying goods and services to the mining sector.
“Some simple arithmetic tells us that, based on the assumption that each person employed in the mining industry supports, on average, another nine people, that close to a quarter of our population depends on the mining industry in one way or another,” Cutifani noted.
In 1950, farming and mining, which together constitute the primary sector as their product is based on natural resources, accounted for 5.1% and 21.2% of total value added respectively. By 1970, farming’s share had slipped to 3.1%, but there was a recovery to 3.4% in 1990. Mining’s share was still a massive 20.7% in 1970, but this almost halved to 10.5% in 1990. Manufacturing had a small 11.5% share in 1950, but this grew to 17.8% in 1970 and then 20.2% in 1990 before slipping to 15.3% in 2012.
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