New survey sheds light on biggest risks to SA mining

The PwC survey cites strikes and high input costs as two of the biggest risks to South African mining.

FILE: PwC today released its sixth South African mine survey, based on annual reports from 37 companies and statistics from both government and the World Bank. Picture: AFP,

JOHANNESBURG - While South African unions continue using above inflation wage demands to grow their membership, a new mine survey has found that salaries still account for the majority of expenses in the industry.

Auditing firm PricewaterhouseCoopers (PwC) today released its sixth South African mine survey, based on annual reports from 37 companies and statistics from both government and the World Bank.

The survey shows that employment with benefits and contractors make up 40 percent of costs, while the rest is divided among royalties, exploration, transport, water, electricity and supplies.

PwC's energy and mining assurance partner Andries Rossouw says strikes and high input costs are two of the biggest risks to South African mining.

"The labour unrest and the socio-economic impact of the environment in which the mining companies operate has been escalated."

Rossouw says using contractors instead of large workforces has more benefits for companies due to the flexibility.

"It provides a level of flexibility and that might be creating more work."

Contract workers are usually paid less than permanent staff and don't have the same benefits making their services cheaper for companies already struggling with profit margins.