Facts and Figures on South African Mining
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Transcript of Facts and Figures on South African Mining
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INDUSTRYSNAPSHOT 2
OVERVIEW OF THESA MINING INDUSTRY 3
Generalexploration expendituresby region, US d ollarmillions 5
Key mineral
industry statisticsfor SA 6
SAs role in worldmineral reserves,production & exports 8
Provincialoverview 9
GENERAL MININGINDUSTRY DATA
Safety: fatalities andfatality frequency rates 10
Employment andremuneration onChamber gold andcoal mines 12
Employment andremuneration onSA m ines 12
Income and expenditureof all SA mines 2010 13
AGGREGATE AND SAND
Tota l sales,employment and
total earnings 14
BASE MINERALS
Chromite productionand sales 15
Iron ore and copperproduction and sales 16
COAL INDUSTRY DATA
Annual South Africancoal production, salesand exports 17
Analysis of coal soldby member coalproducers 18
Employment on coalmines 19
DIAMOND DATA
South African d iamondproduction and sales 20
Estimated productionby country & ranking 21
GOLD INDUSTRY DATA
SAs prop ortion ofglobal gold production 22
South African gold
output and sales 23Annual gold productionand average grade,2001 2010 24
Average number ofemployees on Chambergold m ines,2001 2010 25
2010 QUARTERLYSUMMARY OFPRINCIPALOPERATING RESULTSOF CHAMBER GOLD
PRODUCERS
Gold production,average grades,revenue and profitdata 26
Cash operatingcost data, taxation,capex and d ividends 27
Average unit cashoperating costs andprofits 28
MANGANESE ANDCHROME DATA
SA m anganese and
chrome productionand sales 29
PGM DATA
SA platinum andPGM production 30
Platinum supplyand demand 31
Palladium supplyand demand 33
Rhodium supplyand demand 34
SILVER INDUSTRYDATA
Annual SA silverproduction and sales 35
URANIUMINDUSTRIAL DATA
Uranium output,1952 2010 36
Cum ulative uraniumoutput 37
Contents
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THE SOUTH AFRICAN MINING SECTOR IN 2010:
Contri buti on to Investment and GDPIn 2010, the mining sector accounted for 8.6% of GDP directly on a nominal basis. If
the indirect multiplier and induced effects of mining are included then the overall con-
tribution to GDP is closer to 19%. In that same year, mining GDP grew by 5.8%, but
this was insufficient to overcome the declined 5.6% and 4.2% in 2008 and 2009 re-
spec tively. Real mining GDP of R1 00.6 -b illion in 20 10 w as still smaller than peak m ining
GDP of R105.4-billion achieved in 2007 just prior to the global financial c risis.
Mining sector real fixed investment, which rose strongly in 2007 and 200 8 (up 31.3%
and 27.5% respectively) was hard hit by the global financial crisis and domestic con-
straints, falling to a 7.2% growth rate in 2009 and a 4.7% decline in 2010. Not only did
th e financial crisis hit prices but domestic constraints including regulatory uncertainty,infrastructure constraints and other issues affected investment by mining companies.
However, mining still accounted for 20% of private sector investment and 12.1% of
total investment in the economy in 2010. The mining sector continued to be a key
com ponent of the Johannesburg Securities Exchange (JSE) and acc ounted for 43% or
R1.9-trillion of the value of the JSE at the end of 2010.
Total 2010 m ining p roduction grew by 5 .4% with platinum group m etal (pgm ) produc -
tion up 5.9% , coal production up by 1.6% , iron ore production increased 6.1%, m an-
ganese production grew by 56.6% and d iamond p roduction imp roved 45.1% albeit off
a low b ase in 2009. Gold production fell by 4.5% , a m uch slower rate of decline versus
the 7.1% decline in production recorded in 2009.
SA Mineral Sales and Expor tsSouth African mineral sales rose by 24.9% to R302.2billion in 2010. This means that
the value of mineral sales in nom inal terms is just bac k to the record sales recorded in
2008 prior to the global crisis.
The improvement in mineral sales in 201 0 w as driven by the 27.7 % inc rease in the val-
ue of pgm sales to R73.8-billion, the 11.8% improvement in coal sales to R73.2-billion,
the 9% rise in gold sales to R53.1- billion, the 60% rise in iron ore sales to R43 .4-b illion,
the 90.8% rise in manganese sales to R10.7-billion and the 81.2% increase in chrome
ore sales to R6.6-billion. The top five minerals accounted for 84.1% of South Africas
total mineral sales in 2010 .
Total primary mineral sales exports increased by 26.8% to a total of R224.2-billion in
2010. This acc ounted for 3 5.9% of South Africas total merchandise exports. If second-
ary beneficiated minerals are added to primary exports, such as pgm catalytic convert-
ers, ferro-alloys, steel, chemicals, and plastics, then the minerals complex accounted
for about 50% of South Africas total merchandise exports.
2 Facts & Figur es 2010
South Afr ican m ining i ndustr y snapshot
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Income and expendi ture of t he South Afr ican Mining IndustryThe South African mining industrys total income in 2010 was R424-billion while ex-
penditure was R441-billion. R228.4-billion was spent on purchases and operating
cos ts such as timber, steel, explosives, electricity, transport and uniforms. R78.4 -bil-
lion was paid on salaries and wages for mine employees, R49-billion on capex, R17.1-
billion in tax, R16.2-billion in dividends, R38-billion on depreciation and impairments
and R13-billion on interest to the banks. Estimates by the Chamber suggest that only
about R34-billion or 8% of the total expenditure is moved offshore. That means that
92% of the value of local mining expenditures are effectively captured in South Africa
resulting in the creation of thousands of jobs and significant multiplier effects into the
rest of the economy.
In addition, it is important to dispel the myth that all mined products are exported in
raw form with very little downstream beneficiation taking place locally. Nearly 100% of
South Africas cement and building aggregates are made locally and 80% of the coun-trys steel is made locally from locally mined iron ore, chrome, manganese and coking
coal using furnaces that are 95% powered by electricity from coal fired pow er stations
(the 20% imported steel is speciality steel products not made locally). Over 30% of the
countrys liquid fuels are producedwithin the country from locally mined coal and 95%
of electricity is generated in power plants that use locally mined coal. Most domestic
South Afr ic an m ining industr y overview 2010
Facts & Figur es 2010 3
The contributi on of m ining to SA over the past decade expressed in 2010 real rand terms
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4 Facts & Figur es 2010
Industry overview 2010
chemicals, fertilisers, waxes, polymers and plastics are fabricated using locally mined
minerals and coal and 20% of the worlds platinum catalytic converters are made inSouth Africa. The Chamber estimates that another R200-billion in sales value and 150
000 jobs c an be attr ibuted to the local downstream beneficiation secto rs. All South Af-
ricas gold and pgms are refined locally and mo re than 50% o f diamo nds by value are
sold locally into the downstream diamond cutting and polishing industry.
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Facts & Figur es 2010 5
Expl orat ion: global expendit ures by region
GLOBAL EXPLORATION EXPENDITURE
Global exploration expenditures recovered sharply in 2010 after the global fi-nancia l cr is is induced s lowdo wn in 2008/ 2009. Ac cord ing to the Meta ls Eco-nomics Group (MEG), g lobal non- fer rous meta ls exp lorat ion budgets grew
by 44.9% in 2010 to US$12.1-b i l l ion, when compared to US$8.4-b i l l ion spent in2009. Grassroots exp lorat ion remained w eak as the estab l ished m in ing c omp aniesconc entra ted on la te stage and m ine-s i te spending away f rom the mo re r isky grass-roots spending. Grassroots exp lorat ion spending w as about 32 % of the to ta l spendcom pared to t he recent h igh of 50% in 2001. Never the less, exp lorat ion expendi tureby jun ior resource comp anies p icked up in 2010 and acco unted for 42% of the ex-p lorat ion spend versus about 3 8% for the major min ing co mp anies.
Accord ing to MEG, Lat in Amer ica again a t t racted the major i ty o f exp lorat ionspending wi th 26% of the to ta l , fo l lowed by Canada wi th 19%, Afr ica wi th 13%and Austra l ia wi th 12%. South Afr ica, despi te having the wor ld s largest in s i tuva lue of m inera l deposi ts , on ly accounted for about 1 .4% of to ta l g lobal exp lorat ion
expendi ture. Whi le South Afr ica accounted for 34% of Afr ica s exp lorat ion expendi -ture in 2003, th is had dropped to 12% by 2010. Th is co incides wi th the country sdec l ine in the Fraser Insti tute s rankings of the attrac tiveness of a count rys m ineralpo l ic ies to exp lorat ion m anagers. In 2005 /06 , South Afr ica w as ranked 53 out o f 65countr ies, but had s l ipped do wn t he rankings to 6 7 out o f 79 m in ing jur isd ict ions in2010/ 11. Pol icy uncer ta in ty and government c hanging the ru les are considered tobe key reasons for South Afr icasfal l in the global rankings and why the country isat t ract ing an every-decreasing share of the Afr ican and g lobal exp lorat ion spends.
Acco rd ing to MEG, go ld acc ounted for 51% of exp lorat ion expendi tures fo llowedby base meta ls a t 33%, d iamonds a t 4% and p gms a t 2% .
Worldwide explorationexpendi tur e by region , 2010 (MEG)
Worldwide nonferrous explorationbudgets by target , 2010 (MEG)
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6 Facts & Figur es 2010
Key mi neral industr y statist ics for SA
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Facts & Figur es 2010 7
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Facts & Figur es 20108
SAs role in w orld m ineral resources, product ionand expor ts, 2009 (lat est available data)
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Facts & Figur es 2010 9
Provincial overview (latest available data)
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10 Facts & Figur es 2010
Safety: fatalities & fatality frequency rates (FFR) on SA mines
FFR all sec tors
FFR gold m ines
FFR platinum min es
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South Afr ican m ining i ndustr y snapshot
Facts & Figur es 2010 11
FFR coa l m ines
FFR oth er mi nes
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12 Facts & Figur es 2010
Em ployment and remu neration onChamber m ember gold & coal m ines 2010
Empl oyment and remun eration on all m ines in SA, 2010
PGMs 37%
Gold 32%Coal 15%
Source: DMR
Percentage earnings on all SA mines including contractors
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Facts & Figur es 2010 13
Income and expendit ure of all SA m ines, 2010
INCOME & EXPENDITURE
In 2010, the RSA mining industrys total income was R424 bi l l ion whi le expenditure wasR441 bi l l ion. R228.4 bi l l ion was spent on purchases and operat ing costs (t imber, steel,explosives, electr ici ty, transport, uni forms, etc.), R78.4 bi l l ion w ent on salaries and w ages
for mine employees, R49 bil l ion on capex (the lifeblood of mining), R17.1 bil l ion in tax, R16.2bi l lion in dividends, R38 bi l lion on depreciat ion and impairments and R13 b i ll ion o n interest tothe banks. Est imates by the Cham ber of Mines suggest that o nly about R34 bi l lion or 8% of thetotal expenditures go offshore ( i .e. some of the dividend stream, some procurement of inputmaterials, etc.). That effect ively means that 9 2% of the value of the RSA mining expendituresare effectively captured in South Africa - i.e. The benefits of RSA mining expenditures arecaptured local ly, result ing in the creat ion of hundreds of thousands of jobs and significantmult ip l ier effects into the rest o f the econom y.
In addit ion, i t is important to dispel the myth that al l mined products are exported in rawform with very l i t t le downstream beneficiation taking place locally. Again lets explore thefacts. Nearly 100% of South Afr icas cement and bui lding aggregates are made local ly fromlocal ly mined p roducts . 80% of RSAs steel is made local ly from loc al ly mined iron ore, chrom e,manganese, coking coal and via furnaces that are 95% powered by electr ici ty from coal fire dpow er stat ions (the 20% imported st eel is special ity steel products not m ade local ly). Over 30%of the c ountrys l iquid fuels are made local ly from local ly mined c oal. 95% of RSAs electr ici ty ismade via pow er plants that use local ly mined c oal. Most of our do mestic c hemicals, fert i lisers,waxes, polymers, plast ics, etc., are fabricated using local ly mined minerals and coal. 20% ofthe worlds p lat inum c atalyt ic converters are made in RSA, and so on. The Chamber of M inesestimates that another R200 b i ll ion in sales value and 150 00 0 jobs w ere attr ibutable back tothe downstream beneficiat ion sectors in South Afr ica. Al l of RSAs go ld and pg ms are refine dlocal ly and more than 50% of RSAs diamonds by value are sold local ly into the downstreamdiamond cutt ing and p ol ishing industry. Again the point to be m ade is that a significant port ionof RSA mineral output is beneficiated local ly w here the com mercial opportunit ies exist.
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14 Facts & Figur es 2010
Aggregate & sand sales, empl oyment& total earnings, 2001 - 2010
Empl oyment & t otal employee earnings on SA aggregate and sand quarr ies
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Facts & Figur es 2010 15
Base min erals product ion and sales2001 - 2010: chromi te
Employment & total employee earnings on SA chromite mines
Source: DMR
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16 Facts & Figur es 2010
Base minerals producti on & sales,2001 - 2010: iron ore & copper
IRON ORE
The interconnectedness of the iron ore-steel value chain was again evident during 2010as the recovery in the global economy fed through into growth in steel and iron oreproduction. The global economy recovered from a 0.5% decline in output in 2009 to
record a 5.1% g rowth rate in 2010. Global steel production grew by 16.2 % to 1.4 bil lion tons,while the trade in global iron ore increased by 9.3 % to just over one billion tons in 201 0. Globaliron ore reserves are estimated to be 180 billion tons of crude ore with an iron ore content ofabout 87 b illion tons (source USGS).
In 2010, benchmark iron ore prices moved away from the traditional annual price settingsystem to a new quarterly basis of determination. The annual average contract price increasedin 2010 by 82.4% year-on-year to $145.9 per dry metric ton while quarterly prices varied.
In 2010, Sout h Africa prod uced 5 8.7 m illion tons (MT) of iron ore, which w as a 6.1% increaseon the previous years total. Domestic sales grew by 26.2% to 10.6 MT while export salesgrew by 6.6% to 47.5 MT. Local sales were valued at R3.2-billion while export sales realisedR40.1-billion. Total iron ore sales grew by 60% overall to R43.4-billion, making iron ore the
fourth largest com pon ent of the South African m ining indust ry by sales value. Iron ore exportsaccounted for 6.4% of total merchandise exports. In 2010, the sector employed 18 216people and paid R3-billion in wages.
Empl oyment & t otal employee earnings on SA iron ore mines
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Facts & Figur es 2010 17
Annual SA coal produ ct ion, sales& export s, 2001 - 2010
Volume of local & exportcomponents of SA coal sales, 2010
Value of local & exportcomponents of SA coal sales, 2010
COAL
In 2010 , the wor ld seaborne s team co al market grew by about 6 .3% to 771 m i ll iontons (MT) on the back of s t rong growth in impor ts of coal in to China and Indiacom bined wi th a s tabi l isat ion in impor t dem and b y countr ies such as Japan. South
Afr ican coal expor ts rose by 9.7% to 66.3 MT in 2010, but th is was of f a very lowbase in 2009.
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18 Facts & Figur es 2010
Analysis of coal sold by Chamb er m embercoal producers in 2010
Percentage of coal sales value by Chamber mem bers
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Facts & Figur es 2010 19
Em ploym ent on SA coal m ines, 2010
Despi te h igher saleable coal product ion of 25 4 M T in 2010, (up 1.6% on 2 009) andhigher local and export pr ices, the total value of coal sales rose by 11.8% to R73.2-bi l l ion. This sales value entrenches the coal mining sector as the second largestcom ponent o f the South Afr ican mining indust ry af ter p lat inum g roup m etals . In 2010,South Afr ican saleable coal product ion increased by 1.6% to 254.5 MT. Domest iccoal sales increased by 1.9% to 188.1 M T and expor ts grew by 9.7% to 66.3 M T.
Exports from the Richards Bay Coal Terminal (RBCT) amounted to 63.4 MT in2010, an increase of 3.7% f rom 61.1M T in 200 9, but s t i ll shor t of 27.6 MT of RBCTsful l potent ial . Coal exports to the Far East and Asia increased by 54% with Indiaand China now import ing the major i ty (54.5%) of South Afr icas export coal , whi leexpor ts to Europe s lowed s ignificantly (42%) on the basis of the aftermath of theglobal economic cr is is.
The number o f peop le employed in the local coal min ing indust ry increased by 4.3%to 73 817 people in 2010. Employees earned R14.1-bi l l ion in salar ies and wagesin that year. The indust ry accounted for abo ut 1.2% of GDP d i rec t ly (and 3 % i f theindirect mul t ipl ier and induced effects are added). The coal sector accounted for5.9% o f merchandise expor ts in 2010.
Empl oyment & t otal employee earnings on SA coal mines
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Diam ond product ion and sales, 2001 - 2010
DIAMONDS
2010 can be defined as a year of recovery as thediamond mining sector recovered from the worstrecession to hit the industry in more than half a
century. With almost 75% of cut diamonds normallydestined for the developed markets of North America,Japan and Europe, the emergence of these econom iesfrom the 2009 global financial crisis, when combinedwith higher levels of dem and in emerging m arkets l ikeChina and India, helped t he diamond value chain stagea remarkable recovery during 2010 .
Global diamond production is estimated by theKimberley Process Certification Scheme (KPCS) tohave increased by 11% to 133 mil l ion carats in 2010,with the value of the rough diamonds produced risingstrongly by 45% to approximately US$12-bil l ion.
In 2010, global diamond retail sales rose by 2.5%to US$ 60-b ill ion, g lobal jewellery sales rose by 7% toUS$150-bil l ion and polished diamond prices improvedby about 6%. The strong price recovery was driven
Empl oyment & t otal employee earnings on SA diam ond mi nes
Facts & Figur es 2010
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Facts & Figur es 2010 21
Diam ond produc ti on (estim ate), 2010
by re-stocking and a rebound in the global diamond market, particularly with the r ise inpolished demand from China and India.
Research by IDEX concludes that the economic indicator with the most significantcorrelation to d iamond sales is not consum er confidence but economic growth. The bounceback into positive growth terr itory in global growth , and in particular the traditional developedmarkets of the USA, Europe and Japan spurred the recovery across all components ofthe value chain. Sales of rough diamonds to the cutting centres, increased in l ine withproduction, growing by 78% to US$12.5-bil l ion from US$7-bil l ion in 2009. The value ofpolished diamonds escalated by 39% to US$17.5-bil l ion, while the retail sales of diamondjew el ler y ro se 2 .5 % to US $60.2 -b illion.
The International Diamond Exchange (IDEX) estimates total jewellery sales increased by7% to US$150-bil l ion in 2010. The United States in particular experienced a remarkablerecovery in dem and w ith jewellery sales r ising 7.7% to US$6 3.4- bil lion, which w as far aheadof most analysts predictions.
Global economic growth and strong retail confidence is expected to underpin positiveconsum er demand growt h for diamond jewellery in 2011 . This will be driven by the recoveryof the United States diamond jewellery market and the continued strong growth in Chinaand India. Risks to global demand include global polit ical and economic shocks, consumerprice inflation, financial system fragil i ty, and exchange rate volati l i ty. Long-term supply/demand dynamics however, remain attractive.
Value of wor ld diam ond produc tion (US$-bn), 2010 ($12-bn t otal)
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Facts & Figur es 201022
South African gold production as a percentage of total w orld production
Gold product ion: estim ated total w orld& proport ion pr oduced by SA
GOLD
IIn 2010, the gold p r ice rose to a record US$1 2 25 an ounc e on the back o f increasedglobal uncertainty, grow ing physical demand for fabr icat ion and physical investmentpurposes and the first net central bank buying of gold since 1990. The continued
fragi l i ty of the global economy and debt overhangs in advanced economies, togetherwith vulnerable housing and equi ty markets cont inue to force p ol icy m akers in advancedeconom ies to be cautious, which should co ntinue to suppo rt r is ing gold pr ices.
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Facts & Figur es 2010 23
Emp loym ent & total empl oyee earnings on SA gold mi nes
SA gold out put & sales, 2001 - 2 010
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24
The high pr ices and the benefits of strong explorat ion expendi tures in gold in thepreceding five years fed through into higher produc t ion in most prod ucing countr ies.China reaffirmed i ts status as the wor lds largest producer wi th an increase in theproduct ion of 8.3% to 350.9 tons, whi le Austral ia grew product ion by 17.1% to 260.9tons and the Uni ted States increased product ion by 6.7% to 233.9 tons. South Afr icawas not able to take advantage of higher pr ices, and product ion est imates by GFMSsuggest that product ion decl ined by 7.5% to 203.3 tons in 2010, which means thatSouth Afr ica has sl ipp ed to fif th posi t ion on the g lobal gold produc t ion annual rankings.The GFMS numb er for South Afr ica at 20 3.3 to ns is s light ly more than the 1 91.4 t onsrecorded b y the Chamber as the GFMS numb er includes an est imate for the product ionof i l l icit gold from the country.
In 2010, the rand gold pr ice increased by only 9.9% to R286 403 per k i logram, asthe strengthening rand exchange rate eroded much of the gains in dol lar pr ices. Therand appreciated by 13.2% to R7.32/US$.in the first hal f of 2011, and grew by 9.9%on a year-on-year basis to R6.79/ US$ in the second q uarter of 201 1. Despi te the 26%rise in the dol lar gold pr ice to US$1 506 per ounce in the second quarter , the 9.9%
appreciat ion in the rand exchange rate meant that the rand pr ice of gold rose moremodest ly by 13.9% to R329 192 per k i logram.
The gold mining sector remained a key contr ibutor to the South Afr ican economyin 2010 and accounted for R53.1-bi l l ion in foreign currency earnings or 8.5% of totalmerchandise exports ( the single largest mineral export after plat inum group metals)and ab out 2 % o f GDP (i f the mult ipl iers and induced effect are included). for the sectoremplyed 157 019 people in 2010 and they earned R19.9-bi l l ion in wages. The goldsector employs 32% of the labour employed in the mining sector and remains a keygenerator of employment and export earnings. The industry invested R11.1-bi l l ion incapi tal expendi ture in the co untry, paid an est imated R271 mill ion in d i rect taxat ion andR562-mil l ion in dividends.
Annual gold product ion & average grade ofChamber m ember gold pr oducers, 2001 - 2010
Facts & Figur es 2010
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Facts & Figur es 2010 25
Average number of employees in service, including contractors,on Chamber m ember gold m ines
Average number of employees in service, inc l. contractors,on Chamber member gold mines, 2001 - 2010
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Ore mi lled on Chamber m embergold m ines: 2010
2010 Quarterly sum m ary of operating resultsof Chamb er gold p roducers
NOTES:
Operating revenue includes
revenue from gold andsilver and, in certain cases,revenue from o ther sources,
but excludes revenue from
uranium and sulphuric acid.
Certain mines have enteredinto gold hedging transac-
tions, the effect of which is
brought into account in goldrevenue.
Net sundry revenue and
expenditure includes inter-est, royalties, payments to
Far West Rand Dolomite
Water Association, tribute
revenue, etc.
Gold p roduction on Chambermember gold mines: 2010
26 Facts & Figur es 2010
For detailed company working results, go to : www.chamberofmines.org.za
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Facts & Figur es 2010 27
Cash operating costs per ton m illedon Chamber gold mines, 2010
NOTES:
In addition, gold produc tion by non-chamber m embers has been ascertained to b e 19 959,7 kgs.(Revised June 2011)The gold producers above treated 2 436 862 m etric tons of material to produce 69 1 359 kilograms of uraniumoxide of grade = 0,284 kg /ton.The financial results are published in acc ordanc e with international financial accounting standards.Anglogold Ashanti: Profit from sales of the by-products uranium and acid/or pyrite, is offset against cash costs,in accordance with the Gold Institute definition.Retrenchment costs are included net of other costs.
DRDGOLD: Grade calculation excludes surface tons (= 22 665,317 tons) and kilograms gold produced(= 5 211,3 kg) from 2nd & 3rd time milling and treatment ops.Harmony (Elandsrand) has been renamed Harmony (Kusasalethu)The data in this report refers to South African op erations only.Totals may not add du e to rounding.
2010 Quarterly summary of operating resultsof Chamber gold producers
Operating profit per ton m illed onChamber gold mines, 2010
Source: Chamber of M ines
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28 Facts & Figur es 2010
Operating revenue/kg (R)
Annual average unit cash operating costs & profits ofChamber member gold producers, 2001 - 2010
Source: Chamber of M ines
Cash operating costs/ kg (R)
Source: Chamber of M ines
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South Afr ican m ining i ndustr y snapshot
Facts & Figur es 2010 29
SA m anganese & chr ome product ion and sales
Empl oyment & t otal employee earnings on SA manganese mines
MANGANESE
South African primary manganese ore produc tionincreased by 57% in 2010 to 7.1 mil l iontons, coinciding with the global economic
recovery. Of the total production, 5.9 mil l ion tonswas exported while 17% was consumed locally.Total sales amount ed to R10.6- bil lion. Export salesaccounted for majority of the total sales amountingto R9.3-billion (2009: R5-billion), while local saleswere R1.3-bil l ion (2009: R5.8-mil l ion) Export salesand local sales increased by 90.8% and 126%from 2009 respectively. The average unit value ofmanganese exported amounts to R1 560 p er ton upby 24% from R1 258 per ton in 2009.
The South Afr ican manganese mines employed5 879 people and paid R946-mill ion in wages and
salaries in 2010. The manganese industry alsocontr ibuted 1 .5% to the co untrys total merchandiseexports.
In 2010, m anganese ore prod uction revived in l inewith the recovery in global steel production. Total
global manganese ore production increased by 20% to 13 mil l ion tons in 2010 from 10.8million tons in 2009. South Afr ica accounted for 17% o f world product ion while China wasthe largest and accounted for 22% of the global total.
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30 Facts & Figur es 2010
Plat inum and PGM pr oduct ion in SA
OVERVIEW
Pgms have a wide range of industr ial and high technology applications. Demand forplatinum is primarily driven b y its use in aut ocatalysts and jewellery, though palladiumis also b ecom ing a favoured m etal in these areas. Platinum, how ever, also has a large
range of other applications, predominantly in the chemical, electr ical, medical, glass andpetroleum indu str ies.
The pgm markets had a strong year in 201 0, w ith a significant recovery in demand from theautocatalyst and industr ial markets, grow ing demand from the jewellery sector and increasinginvestor interest in the platinum and palladium markets, p rimarily through exchange tradedfunds (ETFs). Global pgm demand grew by 20% from 493.8 tons in 2009, to 590 tons in2010 . The bulk of this growth w as due to d evelopm ents in the autocatalyst market. The risein vehicle produ ction across all regions in 2010 drove demand for platinum. This was d ue toan improved global economic outlook in 2010, resulting in vehicle manufacture increasingworldw ide and reaching 78 m ill ion units in 2010 , an increase of almost 16 mil lion com paredwith 2009. Global pgm supplies, including scrap, totaled 547.7 tons in 2010. This was 4%higher than the 2009 level. South Afr ica was the largest contr ibutor to the global total and
accounted for approximately 244 tons, followed by Russia at 143.5 tons.Whilst the growth in the major advanced eco nom ies remained restrained, the recovery inlarge emerging economies such as China and India contributed to higher commodity prices.However, the South Afr ican economy failed to benefit from this robust global demandfor commodities and higher prices as domestic constraints held back large increases inproduction. South Afr icas pgm production increased marginally by 0.1% from 238.3 tonsto 244.2 tons in 2010.
Empl oyment & total employee earnings on SA PGM m ines
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Facts & Figur es 2010 31
Platin um supply & demand, 2001 - 2010
Annual platinum supply by country
PLATINUM
The global platinum m arket was almost in perfect
balance, with a surplus of just 0.6 tons in 201 0.Supplies from mining operations remained
relatively flat at 188.5 tons, whi le gross demandincreased by 16% to 245.1 tons. The pract ice ofplatinum recycling increased by almost a third toapproximately 57.2 tons in 2010. Gross demandfor platinum in autocatalysts increased by 43% to97.4 tons in 2010, as the global automotive sectorbounced back from poor levels in 2009. Increasedvehicle prod uction in Europe in p articular benefitedplatinum demand. Gross industr ial demand forplat inum increased by 48% to 52.6 tons in 2010,led by growth in the glass and chemical sectors.Resurgent demand for platinum from the electr ical,chemical and glass sectors came as a result ofeconomic recovery in traditional markets such as
Europe and North America, and substantial newdemand as manufactur ing c apaci ty was constructedin China and other parts of Asia. Gross demandfor platinum from the jewellery sector fell by 14%
to 75.3 tons in 2010, mainly due to lower Chinese demand. Demand from the Chinesejew el ler y indust ry rem aine d re lat ive ly st ro ng at 51 .3 tons . Th is , ho w ever , rep resented a fa llof 21% compared with 2009, when lower platinum prices encouraged exceptional levels ofstock b uilding and sales.
A key feature of 2010, as in recent years, was the size of the investment market forplatinum. Over the past three years, growth in investment has had an increasing influenceon the metals price, while the price has in turn in fluenced investment levels. The totalcum ulative volume of platinum allocated in various physically-backed ETFs around the w orldexceeded 37.3 tons in December 2010. Platinums average price for 2010 was $1,611 perounce.
Source: Johnson Matthey Platinum 2011
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32 Facts & Figur es 2010
Annual palladium supply by country
Source: Johnson Matthey Platinum 2011
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South Afr ican m ining i ndustr y snapshot
Facts & Figur es 2010 33
Palladium supply & demand, 2001 - 2010
PALLADIUM
The palladium market experienced a de
fi
cit of 15.2 tons in 2010. Supplies of palladiumincreased by 3% y-o-y to 226.7 tons, whilst gross demand increased by 23% y-o-yto 299.5 tons, its highest level ever. Open loop recycling of palladium increased by
29% to 57.5 tons. A strong automotive sector in all regions pushed up gross demand forpalladium in autocatalysts by 35% to 169.5 tons in 2010. The demand for palladium ETFsincreased b y 74% and gross industr ial dem and for palladium increased by 2.2 t ons to 76 .8tons in 2010 . Palladium jewellery dem and softened by 20% to 19.3 to ns in 2010. Consum erpurchases of palladium jewellery continued to g row in Europe and No rth America, how ever,dem and dec lined in China, reducing by around a third to 11.8 tons, as high prices and highmanufacturer stoc k levels affected new purchases of palladium.
Investment demand for pal ladium grew b y 74% comp ared w ith 2009, the highest rate ofgrowth in any of the demand sectors. Investors dug deep into ETFs as the palladium priceclimbed rapidly at the end of 2010. Between the end of Novem ber and the end of Decem ber,palladiums price increased by around $100 per ounce and total ETF holdings increasedby 6.2 tons. A feature of investor sentiment for palladium in 2010 was the anticipation ofpotential future supply shortfalls. This, together with strong demand throughout the year,
accounted for much investor interest and also partly explained the price performance. Therecycling of palladium from the open loop sources of automotive, electr ical and jewellerysectors totaled 57.5 tons in 2010, approximately one third higher than in 2009.
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34 Facts & Figur es 2010
Rhodium supply & demand, 2001 - 2010
RHODIUM
The rhodium m arket tightened in 2010 and end ed on a surplus of 3.5 tons. Higher levelsof purchasing by the global automotive sector underpinned a r ise in gross demand forrhodium. The largest share of dem and cam e from use of rhodium in gasoline three way
catalyst (TWC) formulations. All markets, apart from Europe, saw an increase in demandfor rhodium in autocatalysts. Increased capacity uti l isation and construction of new plantsin the chemical and glass sectors further stimulated rhodium purchases. Gross p urchasingstrengthened by 17% to reach 22.5 tons in 2010. Industr ial demand for rhodium increasedwith bett er economic c onditions wo rldwide in 2010. The glass industry increased purchasesby 200% compared with 2009, as new demand for TFTLCD glass in electronic goods andglass fibre prompted the building of new and replacement manufacturing capacity.
Demand for rhodium from the chemical sector increased by 25% to 2.1 tons, as plantswere run at higher capacity and new oxo-alcohol plants were constructed. Recycling ofrhodium in the autocatalyst sector increased by 26% to 7.3 tons, driven by higher metalprices which enco uraged greater recovery from sc rap. Levels of recycling were also bo ostedby end-of- l i fe vehicles from car scrappage schemes, which worked their way through therecycling chain during 2010. With strong recovery in the automotive sector, the rhodium
price traded on average 54% higher than in 2009, at $2,458, supported by good physicalpurchasing in early 2010 .
Annual rhodium supply by country
Source: Johnson Matthey Platinum 2011
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Facts & Figur es 2010 35
Silver: annual SA output & sales, 1910 - 2010
NOTES:
+ From 1981 the figuresrepresent sales of silver.
* Provisional
Source: DMR
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South Afr ican m ining i ndustr y snapshot
36 Facts & Figur es 2010
NOTES:
+ Includes production from FreeState Cons. Gold Mines Metal-
lurgical Scheme. These figures
are excluded from the gradecalculation.
* Total Proc tion. Includes
non-memb ers of the Chamber.
Uranium output of Chamber members & total annual SAproduction, 1952 - 2010
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South Afr ican m ining i ndustr y snapshot
Facts & Figur es 2010 37
NOTES:
(a) Conso lidated operations
of the company and its whollyowned subsidiaries.
(b) Ceased production in
October 1956, due to floodingand subsequently became a
wholly owned subsidiary of
Harmony.(c) Became a wholly ownedsubsidiary of Harmo ny.
(d) Ceased uranium produc-
tion at the end of 1974 - re-sumed production 1976 and
ceased uranium production
in 1981.(e) Includes Joint Prod uction
Schem e with Vaal Reefs. As
from 20 September 1971,merged with Vaal Reefs.
(f) As from 1 July 1972 ,
merged with Hartebeestfon-
tein.(g) As from 1977, merged
with Free State Geduld - see
note (h).(h) These Mines to gether
with Free State Geduld; Free
State Saaiplaas; and WesternHoldings - as from 197 7,
are participants in the Anglo
American O.F.S. Joint Metal-lurgical Production Scheme,
which has m erged with Free
State Con s. (South Region).
(i) As from 1999, Vaal Reefsrenamed Vaal River Opera-
tions and reports under the
name Anglogold.
Cumulative uranium output , from start of operationsto December 2010 - Chamber members
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Notes
Facts & Figur es 201038
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Notes
Facts & Figur es 2010 39
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Notes