. To put that number in perspective, that is more than R600,000 for every man, woman and child in the country. It amounts to 100 times South Africa’s education budget, seven times the country’s entire GDP and 19 times the entire 2019-20 government budget. That’s a lot of mineral wealth.
Mining has declined significantly as a share of the country’s GDP, from 21% in 1980 to 7% today, representing a contribution to GDP of R291-billion. In real terms, measured in constant 2010 rands, the contribution of mining to GDP has declined on average by 0.8% a year between 2007 and 2016. This is at once an important benefit of mining, as well as one of the major challenges the industry faces. Some 465,000 people are employed in the mining industry, and these workers support an estimated 4.5 million dependents. In addition, mining can claim credit for 1.4 million indirect jobs created in other industries. At the same worker-to-dependant ratio, that would mean almost 20 million South Africans are somehow dependent on the mining industry for their income.
The mining industry spends almost as much on goods and services as it contributes to GDP itself. Of the R245-billion it spent, capital expenditure accounted for R89-billion, and R156-billion went to current spending on goods and services such as transport, storage, communication, chemicals, machinery and equipment. By comparison, the national government reported R188-billion in current spending on goods and services, and all municipalities together accounted for R169-billion similarly.
Six of the country’s 16 largest towns, measured by contribution to GDP, are substantially dependent on mining. These towns are Rustenburg, Middelburg in Mpumalanga, Witbank, Secunda, Sasolburg and Thabazimbi. Some towns, like Kathu in the Northern Cape near Kumba’s Sishen ore mine, wouldn’t exist at all if it was not for mining.
On most economic indicators, Welkom is the worst-performing urban area in South Africa. This is what happens when mining dies.
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