• Editor’s Letter

    Patrick Farrell, editor of Mining Decisions, on milestones

    Editor's Letter

    South Africa’s mining industry celebrates two important anniversaries this year. The younger milestone is the ‘birthday’ of Anglo American, which turns 100. This company, a household name to generations, had small beginnings on the Witwatersrand in 1917. Established by Sir Ernest Oppenheimer, its mining interests gradually spread into manufacturing and a host of other industries. It’s no exaggeration to say that it became a behemoth, with links throughout the entire economy.

    A couple of years ago, it began a radical restructuring programme – disposing of major assets and reducing debt. After being among the worst performers on the London Stock Exchange in 2015, Anglo was the best in the FTSE 100 in 2016. It will concentrate on mining a few commodities, such as copper and diamonds, and is repositioning itself to emerge remoulded as a mining company for a new era.

    The other anniversary commemorates 150 years since diamonds were found and commercial mining operations began. South Africa’s entire mining industry rests on the discovery of a diamond on the banks of the Orange river in 1867 by a 15-year-old boy, Erasmus Jacobs. That stone, 22 carats in size, became known as the Eureka diamond. His find sparked the frenzy that saw 30 000 prospectors flock to the Kimberley area. Diamonds were followed by the discovery of gold in 1886 on the Witwatersrand. Mineral after mineral…

    Railways were needed to transport them, so they were built. Skills were in demand, so universities were established. Layer was added to layer. A diverse manufacturing sector arose in the decades to come, turning the country into an economic powerhouse.

    Industrialised South Africa is built on mining. Last year, according to the Chamber of Mines, the mining industry bought goods and services worth ZAR246 billion, the majority of which were locally produced. It’s true that direct employment has shrunk over the years (it’s about 485 000 workers now) but they support millions of dependants, especially in the rural areas, and hundreds of companies are still big suppliers to the mines.

    Mining (and Anglo American) remain incredibly important components of the South African economy. The fall in commodity prices and general uncertainty and discord between business, government and labour has shrouded the sector in recent times but despite the differences, its value and influence is vital to growth.

    Over the ages, it has proved that time and again.