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Blog: 18 February 2017 (SA's mineral resources)
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In today's blog we take a look at South Africa's mineral resources. We always hear people say that South Africa is a mineral rich country and it has a lot of natural resources. Ok so how much gold does SA have left under ground before it is completely mined up. Or how long will South Africa's platinum or coal reserves last? And how much of these resources have been mined in the last 20 odd years? We look to answer these questions below.
Note data is from Statistics South Africa's environmental economic accounts |
Life expectancy of SA's resources
From the bar chart below it is clear that South Africa's extracted gold (blue bar) has dropped significantly over the years, and with that the years to depletion of South Africa's gold reserves has gone up. As the pace at which it is being mined up has slowed, so the estimated number of years it will take to mine up all the reserves has increased.
While gold output has been falling steadily, the opposite is true for Platinum group metals (PGM). As the graphic below shows production over the years have increased significantly (leading to the massive boom of Rustenburg (the fastest growing city in South Africa in the hart of North West's platinum belt). Even though production has increased significantly over time in the PGM group the years to depletion is still over 200 years (while SA's gold only has about 38 years left).
Another big resource in South Africa, that is not often mentioned in the same breath as Gold and Platinum is Coal. South Africa has vast amounts of coal reserves spread mostly across Mpumalanga and Limpopo. South Africa consumes vast amounts of it via ESKOM who uses it to power their coal powered power stations. But just as we consume a lot of it, a lot of South Africa's coal is exported via Richards Bay Coal Terminal. The graphic below shows SA's coal extracted in tons and number of years before the resource is depleted.
As can be seen from the graphic below South Africa has drastically stepped up the mining of coal since 1993 with it mining almost 80million tons more a year by 2013 when compared to 1993. And at the same time a resource that was set to last 190 years in 1993 (has fallen to just 118 years) in period of 20years worth of mining. Just showing how quickly South Africa is using up its natural resources.
The question that has to be asked is if South Africa's economy benefited enough from the extraction of all it's natural resources (of which most of it is exported)?
And while only a few of the main commodity groups are highlighted South Africa sells a large number of commodities. And a lot of people think that Gold and Platinum is the main income earner for South African mining companies. The following graphic we developed 10 May 2016 and it shows the Rand value of sales of various commodities
The question that has to be asked is if South Africa's economy benefited enough from the extraction of all it's natural resources (of which most of it is exported)?
And while only a few of the main commodity groups are highlighted South Africa sells a large number of commodities. And a lot of people think that Gold and Platinum is the main income earner for South African mining companies. The following graphic we developed 10 May 2016 and it shows the Rand value of sales of various commodities
Stacked bar chart below shows the Rand value of commodities sold per month by South African mining firms
From the above stacked chart, one can see the massive increase in the bottom orange graph (Coal). In 2003 Coal contributed 21% to total sales of commodities, as at January 2016, Coal contributed around 32% of total commodity sales. Platinum group metals (PGM) surged in 2008 and contributed over 30% of total commodity sales in that year. This has dropped off since and as at January 2016, PGM only contributes 21.7% to total sales of commodities.
The commodity South Africa is best known for, Gold, contributed around 30% of total commodity sales in 2003. As at January 2016, this has dropped to around 18%. Essentially Gold has been smashed by Coal since early 2007, as the value of Gold sales have not been higher than Coal sales since early 2007.
South Africa no longer seems to be the country driven by Gold, but rather the country driven by coal. And with coal having 4 times greater years till depletion expect coal and platinum to continue taking shine away from Gold.
The commodity South Africa is best known for, Gold, contributed around 30% of total commodity sales in 2003. As at January 2016, this has dropped to around 18%. Essentially Gold has been smashed by Coal since early 2007, as the value of Gold sales have not been higher than Coal sales since early 2007.
South Africa no longer seems to be the country driven by Gold, but rather the country driven by coal. And with coal having 4 times greater years till depletion expect coal and platinum to continue taking shine away from Gold.