JOHANNESBURG (miningweekly.com) – The challenged South African mining industry, which suffered an aggregated after-tax loss of R13-billion in the first half of this year, is now smaller than it was in 1994, Chamber of Mines of South Africa CEO Roger Baxter said on Thursday.

Speaking at The African Mining Network end-of-year gala event attended by Creamer Media's Mining Weekly Online, Baxter said mining now represented less than 10% of the market capitalisation of the Johannesburg Stock Exchange, down from 30%.

“We’ve been the worst performing sector in the economy,” Baxter said.

Improving productivity and cutting costs were going to be the name of the mining game going forward.

“Our costs have just been going up too quickly and too many of our mines are on the wrong side of the cost curve,” Baxter added.

In platinum, output per worker had declined by 50% and the real cost of labour in platinum had increased by more than 200%.

“We have to look at the things we can fix and we must take this great industry forward,” he urged.

The reason the South African economy as a whole was not growing to the extent that it should was because of mining’s struggle.

More than half of the National Development Plan’s problems could be tackled if the country had a growing mining sector.

A far more effective problem-solving relationship with government was necessary to ensure that South Africa was not in the bottom half of the Fraser Institute’s rankings, below the Democratic Republic of Congo.

The decline in South Africa’s share of global commodity production and reserves needed to be arrested and the resource-endowed country – which exports 60 different minerals to more than 100 countries – needed to take advantage of the reality that modern society could not exist without mining.

Metals and minerals were the building blocks for smart technologies, with each cellphone requiring 16 g of copper, 0.35 g of silver, 0.34 g of gold, 0.015 g of palladium, 0.00034 g of platinum as well as indium, titanium dioxide and indium tin oxide.

Mining was also a major contributor to renewable energy, with a  2 MW wind turbine using 335 t of steel, 4.7 t of copper, 13 t of fibreglass, 3 t of aluminium and 1 200 t of reinforced concrete.

Mined minerals such as talc, mica, kaolin, calcite, titanium dioxide and zinc oxide were used in cosmetics and makeup and toothpaste needed mined silica, limestone, aluminium, phosphate, fluoride, titanium, mica and petroleum.

Despite its fall, mining still contributed 25% of South Africa’s exports, provided 1.4-million jobs, brought in 15% of foreign direct investment and 20% of private investment.

Minerals worth R116-billion were sold locally and considerable mining investment was still taking place.

The local mining industry pumped out 200 megalitres of water a day, which could be treated and put into the system on a cost-recovery basis to augment general water supply.

Treatment of acid mine drainage (AMD) would not only solve the AMD problem but create a significant water resource for Gauteng.

Though there had been an 87% improvement in the mine fatality rate in the last 20 years, the zero fatality target had still not been met and the chamber CEO – now seven months into his the job – requested those attending The African Mining Network to observe a moment’s silence for the 71 mine employees who have died so far this year.