South African mining company profits have plunged by almost half this year, dropping almost R100 billion because of the blows from lower commodity prices, crippling power cuts, rail network constraints and rising costs, News24 said, citing a report by PwC.
An analysis of 29 domestic mining companies showed that combined net income slumped to R108 billion in their latest financial years from a record R206 billion, according to PwC’s annual South Africa Mine report.
Transnet Freight Rail’s poor performance, particularly on the export coal line, has been a major challenge, according to the report.
Despite the decline in earnings, the industry’s profitability is still more favourable than the R32 billion recorded in 2019 or the loss in 2018.
The mining sector’s woes will affect the government, which has benefited from windfall taxes and royalties in the past two years. The sector’s reported tax expense declined by 34%.
The industry continues to play a key role in balancing the national trading account, with mined materials accounting for around 58% of total exports in the first six months of 2023 at R575 billion, according to the South African Revenue Service figures.