South Africa's overall mining profits slipped by more than $5 billion in the last financial year, while the country might have less than 30 years of a viable gold industry left without renewed investment, according to a new report realeased Tuesday (Oct. 03) by big four accounting firm PwC.
The stark predictions for South Africa's gold and iron ore industries are extreme worst-case scenarios.
If the total net profits of 29 major mining companies in South Africa were still far above pre-pandemic levels they were nearly half of the peak $10.8 billion profits in 2021.
The report also highlighted an urgent need for Africa’s most advanced economy to refocus part of its mining sector on green energy metals and minerals like copper, nickel, lithium and cobalt.
It didn't mention whether environmental concerns played a role in lost investment as customers, governments and activists worldwide call for greater action to combat climate change. Mining operations account for some 4% to 7% of global greenhouse gas emissions, according to global consulting firm McKinsey & Company.
Mining contributed nearly 60% of South Africa exports in the first half of 2023.
The annual report said global drops in some commodity prices following the COVID pandemic contributed to the reduced profits as well as local challenges of currency fluctuations, high inflation, power blackouts and logistical problems in exporting minerals because of deteriorating road, rail and port infrastructure in South Africa.