Mining sector can contribute better to economy – Mantashe

Mineral Resources and Energy Minister, Gwede Mantashe, believes that the mining sector remains the backbone of the country’s economy, despite the dip in production.

Mantashe was speaking in Parliament during his Budget Vote speech, where he outlined his department’s initiatives and programmes for the 2023/24 financial year.

Citing the latest statistics, Mantashe said the mining industry contributes meaningfully to the gross domestic product (GDP). While production dropped, he said the value of production registered R1.18 trillion in 2022, up from R1.1 trillion in 2021 on the back of strong global demand.

According to the Minister, the sector created 23 552 jobs between December 2021 and December 2022, resulting in the overall employment of 472 088 workers.

Referring to data from the South African Revenue Service (SARS), Mantashe said the mining sector contributed R89 billion in corporate tax in the 2021/22 financial year and a further R28.45 billion through royalties in the same period, keeping its percentage contribution to the GDP at 7.53%.

“This is a clear indication that mining remains a strong pillar of our economy,” he said.

Mantashe also highlighted the snippets from the latest Fraser Institute Survey, which placed South Africa in the worst position in recent memory.

However, the Minister believes that mining would contribute even better to the economy if the “binding” constraints in electricity, rail and port systems were urgently resolved.

“According to the survey, South Africa is in the bottom quartile on the investment attractiveness index.

“One of the indices highlighted in the Fraser Institute survey is the transparency of licensing systems. To this end, we have, in collaboration with the State Information Technology Agency (SITA), initiated a procurement process for a licensing system with integrity,” he pointed out.