One of South Africa’s top industries hit by turbulence
Many of South Africa’s large mining companies are facing severe challenges, which have seen the industry shed thousands of jobs over the past year – a trend that could continue if their balance sheets do not improve.
PwC’s recent SA Mine 2024 report, Beyond Mining, explained that the past year has been transformative in the South African mining sector.
The report explains that the industry faced headwinds from the global and domestic environments, ranging from geopolitical conflicts, regulatory uncertainty, energy shortages and logistical disruptions to labour challenges and environmental pressures.
“Despite these challenges, the sector demonstrated remarkable resilience and adaptability, finding new ways to survive and thrive in a changing world,” the firm said.
The South African mining sector’s performance over the past year presents a mixed picture. Some commodities benefitted from rising prices, increased demand, and favourable exchange rates, while others suffered from declining markets, oversupply, and logistics constraints.
In the past year, the country‘s most prominent mining investors postponed plans for new projects in response to a slump in profits caused by myriad local challenges and weakening commodity prices, such as palladium.
Many investors also paused expenditures due to the national elections held earlier this year, in which the governing ANC lost its majority for the first time since the dawn of democracy.
“Mining players were also impacted during the period by the sorry state of the railway network operated by Transnet,” PwC said.
“Port inefficiencies, lack of rolling stock, cable theft and inadequate maintenance led to companies either stockpiling or scaling down production and laying off workers, given their inability to efficiently move products to export markets.”
Below is an overview of commodity price changes over the past year, courtesy of PwC’s Beyond Mining report.

The impact of these challenges was reflected in many large mining companies’ results over the past year.
One of the world’s largest platinum miners, Sibanye-Stillwater, recently released its results for the six months through June 2024 on Thursday, which revealed a weak performance for the Platinum Group Metals (PGM) miner.
The company reported a 9% revenue decline to R55.2 billion, which it attributed to lower commodity prices.
Its basic earnings declined from R7.42 billion in H1 2023 to a loss of R7.47 billion – an over 200% decrease. The miner’s adjusted EBITDA fell by 53% to R6.65 billion.
Sibanye avoided a headline loss, reporting headline earnings of R137 million, which is a 98% decline from the previous year.
Sibanye was also one of the miners who turned to cutting jobs when the cycle turned. In April this year, it informed shareholders that it would enter into more Section 189 consultations, with over 4,000 jobs.
Sibanye said the proposed restructuring of the operations and services could potentially affect 3,107 employees and 915 contractors.
This came after previous restructuring at Sibanye which concluded during 2023 and the first quarter of 2024 and also saw thousands of job losses.
Similarly, Anglo American Platinum and Impala Platinum also reported a sharp drop in profits over the last year, which led to these miners’ announcements of job cuts.
In July this year, Anglo American’s platinum business completed a restructuring of its South African operations that resulted in the departure of about 2,800 workers.
The miner announced cost-cutting measures in February this year that impacted 3,700 employees.
In November last year, Impala Platinum started offering voluntary job cuts to miners at its mines in South Africa as part of its measures to combat the steady decline in PGM prices.
“We are obviously doing everything to reduce costs,” Implats spokesperson Johan Theron said at the time. “Labour is a big cost component, so you always start with labour by offering voluntary separation packages.”

Struggling balance sheets
PwC’s report analyzed the mining sector’s performance as a whole and found that it has been mixed.
While gold and diversified minerals miners benefited from share price growth over the last 12 months, those operating in coal and PGM’s saw a decline.
“Despite a global push towards renewable energy, coal remains a critical part of South Africa’s energy mix due to local energy production challenges resulting in the extension of the lives of coal-fuelled power stations,” the firm said.
“The ongoing transition towards renewable energy and the emphasis on community development and environmental responsibility continue to impact the sector’s trajectory.”
Overall, PwC found that the South African mining industry’s gross debt levels have been increasing over the past year while earnings before interest, tax, depreciation and amortisation (EBITDA) have decreased, resulting in a higher gross leverage ratio. This is mainly due to the pressures experienced in the PGM sector.
As of June 2024, the gross leverage ratio of 0.77 was still significantly better than the two times recorded in June 2016.
“It appears that operational declines have been funded significantly by cash on hand, with the industry maintaining a net cash position but at lower levels over time,” the firm explained.
“The industry went into the down cycle much stronger than in the previous down cycle, which means that there is still capacity for debt funding at present.”
However, PwC said labour relations remain a critical issue for the industry, with negotiations ongoing between mining companies and labour unions to address wages, working conditions and job security.
Below is an overview of the consolidated leverage ratios of South Africa’s mining companies, courtesy of PwC’s Beyond Mining report.


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