NAME: MATHENJWA QONDISILE .

STUDENT NO: 200814093

MODULE CODE: ADEV 321

LECTURER: MRS HADEBE

TOPIC: DISCUSS THE ROLES OF MINING INDUSTRY IN THE ECONOMY OF SOUTH

1. INTRODUCTION

2. DEFINITION OF CONCEPTS
3. HISTORY OF THE ECONOMY OF SOUTH AFRICA

4. ROLES OF MINING INDUSTRY

DEFINITION OF TERMS

Mining: the act of extracting ores or coal, etc from the earth. Mining is the extraction (removal)
of minerals and metals from earth.

ROLES OF MINING INDUSTRY IN THE ECONOMY OF SOUTH AFRICA

Mining is a money making business. Not only do mining companies prosper, but governments
also make money from revenues. Workers also receive income and benefits.

AFFECTS TO THE ENVIRONMENT

Mining is generally very destructive to the environment. It is one of the main causes of
deforestation. In order to mine, trees and vegetation are cleared and burned. With the ground
completely bare, large scale mining operations use huge bulldozers and excavations to extract the
metals and minerals from the soil. In order to amalgamate (cluster) the extractions, they use
chemicals such as cyanide, mercury, or methylmercury. These chemicals go through tailings
(pipes) and are often discharged into rivers, streams, bays, and oceans. This pollution
contaminates all living organisms within the body of water and ultimately the people who
depend on the fish for their main source of protein and the economic livelihood.

Environmental issues also include erosion, formation of sinkholes, loss of biodiversity, and
contamination of soil, groundwater and surface water by chemicals from mining processes. In
some cases, additional forest logging is done in the vicinity of mines to increase the available
room for the storage of the created debris and soil. Contamination resulting from leakage of
chemicals can also affect the health of the local population if not properly controlled.

Key sectors

Mining and minerals in South Africa

South Africa's wealth has been built on the country's vast resources - nearly 90% of the platinum metals
on Earth, 80% of the manganese, 73% of the chrome, 45% of the vanadium and 41% of the gold. Only
crude oil and bauxite are not found here.

SA's share of world reserves & production

(Data source: Department of Minerals and Energy)

The country is a leading producer of precious metals such as gold and platinum, as well as of base metals
and coal. It is the world's fourth-largest producer of diamonds.

And experts believe there is still considerable potential for the discovery of other world-class deposits in
areas that have yet to be fully exploited.

Place in the economy

South Africa's position as the world's largest gold producer - a position it held for over a century - was
usurped by China in 2007.

China's gold production for the year was estimated at 276 metric tons by London precious metals
consultancy GFMS, and at 270 tons by the China Gold Association. South Africa, according to the
Chamber of Mines of SA, produced 254 tons of the metal in 2007.

Gold, once a keystone to the South African economy, has diminished in importance as the country's
economy has diversified. In the 1970s and 1980s, gold exports were the predominant source of foreign
exchange earnings, with mining contributing around 14% of total value added in the economy. This has
shifted over time and, in 2007, mining and quarrying contributed about 5.8% to the country's gross
domestic product (GDP).
However, mining as an industry is still crucial to South Africa, with precious metals contributing 65% to
the country's mineral export earnings and 21% of total exports of goods in 2006. The country supplies
about 80% of the world's platinum.

The mining industry is also South Africa's biggest employer, with around 460 000 employees and
another 400 000 employed by the suppliers of goods and services to the industry.

Transformation

Ownership, access and opportunity in regards to the country's mineral resources are regulated by the
Minerals and Petroleum Resources Development Act of 2002, which recognises the state's custodianship
over the country's mineral resources.

Transformation is a key issue facing South Africa's mining sector. Equitable access to mineral resources
and opportunities has been legislated, with meaningful participation of historically disadvantaged
individuals the subject of the industry's black economic empowerment (BEE) charter.

Currently, more than 70% of the mining industry's labour force is black, while less than 5% of managerial
positions are held by black people. Targets have been set by the government and, by 2009, all mining
companies will be expected to have 40% of managerial positions held by previously disadvantaged South
Africans.

Other targets over the next 10 years include the transfer of 26% of mining assets to black-owned
companies, and ensuring that 51% of future mining projects are controlled by black-owned firms.

Strengths

As a major mining country, South Africa's strengths include a high level of technical and production
expertise as well as comprehensive research and development activities.
The country has world-scale primary processing facilities covering carbon steel, stainless steel and
aluminium, in addition to gold and platinum. It is also a world leader of new technologies, such as a
ground-breaking process that converts low-grade superfine iron ore into high-quality iron units.

This kind of beneficiation, or adding of value to raw mineral materials before export, has been
indentified by the government as a major growth area. There are lucrative opportunities for
downstream processing and adding value locally to iron, carbon steel, stainless steel, aluminium,
platinum group metals and gold.

Industry leaders

Two of the world's biggest mining companies originated in South Africa. BHP Billiton, the world's largest
mining company, came after a merger between South African company Billiton and Australian firm BHP.

Anglo American Plc, which has its primary listing in London and its secondary listing in Johannesburg,
owns many major subsidiaries, such as Anglo Platinum, Anglo Coal, Impala Platinum and Kumba Iron
Ore.

Diamond miner De Beers, also a South African company, is owned by Anglo American and a consortium
led by the Botswanan government. The world's top diamond producer churned out about 51.1-million
carats in 2007.

New developments

There are many new developments in the pipeline for South African mining. These include:

Anglo-Australian miner Rio Tinto plans to build a US$2.7-billion (around R21-billion) aluminium smelter
at the Coega industrial development zone near Port Elizabeth in the Eastern Cape. It would produce
around 720 000 tons of aluminium a year, and would be the largest greenfield investment in South
Africa to date.
Russian billionaire Viktor Vekselberg has said he would be investing US$1-billion in manganese
production in South Africa. In September 2006, he announced plans to build a manganese and
ferroalloys plant at Coega. And early in 2008, United Manganese of Kalahari, a South African venture
part-owned by Vekselberg, announced plans to spend US$200-million to develop an untapped deposit.

Mining giant De Beers is building two new mines in South Africa. The first, at Voorspoed in the Free
State, is expected to start production towards the end of 2008, and will produce about 700 000 carats a
year. The second, already in production, is part of the South African Sea Areas offshore marine mining
division. The mining ship Peace in Africa will produce about 200 000 carats a year.

Indian steel giant Tata Steel is constructing a R650-million high-carbon ferrochrome plant at Richards
Bay on the KwaZulu-Natal coast.

Mining industry of South AfricaFrom Wikipedia, the free encyclopedia

Jump to: navigation, search

Premier Diamond Mine, Cullinan, Gauteng, South AfricaMining in South Africa has been the main driving
force behind the history and development of Africa's most advanced and richest economy. Large scale
and profitable mining started with the discovery of a diamond on the banks of the Orange River in 1867
by Erasmus Jacobs and the subsequent discovery and exploitation of the Kimberley pipes a few years
later. Gold rushes to Pilgrim's Rest and Barberton were precursors to the biggest discovery of all, the
Main Reef/Main Reef Leader on GerhardusOosthuizen's farm Langlaagte, Portion C, in 1886, the
Witwatersrand Gold Rush and the subsequent rapid development of the gold field there, the biggest of
them all.

Diamond and gold production may now be well down from their peaks, though South Africa is still no. 2
in gold[1] but South Africa remains a cornucopia of mineral riches. It is the world's largest producer[2] of
chrome, manganese, platinum, vanadium and vermiculite. It is the second largest producer[3] of
ilmenite, palladium, rutile and zirconium. It is also the world's third largest coal exporter.[4]

Ad&didsadvantages of mining

Interested in advantages and disadvantages of gold mining in South Africa? Learn more about the
gold-mining advantages and disadvantages in South Africa...
Gold-mining in South Africa started in full force in 1887 when the newly created town of
Johannesburg started filling up with foreign settlers. South Africa is considered the world leader in
mining resources because it has an abundant amount of natural minerals and gemstones. It is by far
the largest producer of gold as well as platinum in the international minerals market. In fact, its
diamond industry is ranked as the fourth largest in the world and even though the entire mining
industry is more than a century old, it is still considered largely untapped. Only matched by the former
Soviet Union in terms of its reserves, South Africa has a large potential and therefore offers many
advantages for gold mining enterprises.

Not only does the country have the minerals but it also has done extensive development and research
and incorporated the use of high-tech devices to mine effectively. That makes it a strong international
competitor because its world-class facilities and equipment are available to facilitate gold and
platinum extraction along with creating carbon and stainless steel or setting up aluminum production.

The richest mines for gold-mining are the Rand and, historically, the diamond millionaires of
Kimberley quickly located to Johannesburg to cash in on the gold rush. Even though there's a large
quantity of ore for mining available, there are many disadvantages offered by the precarious nature of
mining. The rocks are heated at 50°C and are located at depths of 3000 m.

Large quantities of water are pumped outside to make space for human and machine entrance. It is
very costly and there is now a requirement for new refrigeration systems that allow workers to work
in these conditions at such extreme depths in relative comfort.

The world's largest ice machine, which has 3 million times the capacity of a household refrigerator, is
placed in the Harmony mine. This entails a high degree of investment in infrastructure and, if anything
breaks down, a whole day can be wasted until the malfunctioning machinery is replaced or repaired,
which is also not easy. Half of the production costs lie on equipment while the other half are borne by
getting good quality labor. This is another major disadvantage because there's a lot of pressure on
gold mine owners to increase the wages and improve conditions all of which contribute to their
expense. In the years 1970 to 1990 gold production had fallen by 40% and the quality of the gold ore
was drastically reduced. This indicates another major disadvantage as overhead costs and technical
issues run deep. As the productivity decreases the wages are increasing and low depth mines are
competing with the older ones.
The disadvantage of mining gold is also evident in the fact that while the international gold price
fluctuates the cost of overheads remains constant and therefore directly affects the profits of the
mining firms.

Advantages of Gold Mining in South Africa

Conversely, advantages include the following: gold mining in Africa not only provides vast
opportunities for employment, but also is a good source of trade. This is evident in multiple facets
both in terms of unfinished gold and finished gold ornaments that create vast employment
opportunities for skilled and unskilled locals as well as foreigners.

A large number of foreign employees work for the gold mines in Africa and this brings in tourism from
visiting families as well as international exposure. Furthermore, the families are also a source of
income generation as they occupy accommodations and need to school their families, thereby
providing foreign currency to the local economy. Gold is also one asset that can be traded across the
board at any time and it can be used to back currency. It has resulted in a change of ownership
structure and has empowered the local black populatione.

Vision:

To achieve a policy, legislative and governance framework, which is widely supported and which will
allow the mining industry to convert as great a part of the country’s abundant mineral resources into
wealth for the benefit of South Africa.

Mission:

To position the Chamber as the most relevant and highly respected advocacy organisation in South
Africa and as the recognised authoritative voice of mining in South Africa. To perpetuate our efforts to
achieve the situation where all significant stakeholders will regard the Chamber and its staff as the
leading knowledge-based resource on all issues pertinent to mining.