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Mining
The global financial crisis that began in 2008 rapidly worsened in 2009 into an
economic meltdown not seen since the early decades of the 20th century. The impact
on the South African economy and the country’s mining sector was severe. South
Africa was officially declared in recession after gross domestic product shrank by
more than 6% in the first quarter of 2009.
The mining industry, already suffering from three consecutive years of declining
output (1,6% in 2006, 0,8% in 2007 and 7% in 2008), saw output drop 9% in the first
half of the review period. This was accompanied by a drop in the prices of most
commodities traditionally sold in the global marketplace as demand dried up in major
developed markets. Platinum group metals were particularly affected due to the
dramatic decrease in vehicle sales, while the gold and diamond mining sectors
suffered from an equally dramatic decrease in consumers’ disposable income,
with luxury goods first affected.
By year end, stability appeared to be returning to financial markets, and international
stock exchanges were showing signs of recovery. For the mining industry, the
significant recovery unfolding in key economies is a welcome precursor to improved
demand.
Performance
The mining division delivered a commendable performance for the review period,
reporting revenue of R679,2 million (2008: R719,7 million). Operating profit was
R113,9 million (2008: R124,5 million) at a margin of 16,8%, slightly down from
the prior year operating margin of 17,3%. These results reflect the heightened focus
on productivity and cost containment during the year, despite the difficult trading
conditions as a result of the collapse of the commodities market. With an order book
of R1,4 billion (2008: R685 million), the division is well placed to improve its
performance in 2010.
Management
Frans van Wyk, Antonie Fourie, Paul Merifield, Francois Stock, Derek Leatherbarrow,
Danny Stopforth, Charles Schloesser, Eppo Broos, Trevor Moldenhauer, Stephen Marx
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Employees 993 |
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Contribution to revenue 14.6% |
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