Mining Sector Faces Revenue Crisis in South Africa’s 2024 Budget

South Africa’s mining sector is facing a sharp decline in tax revenue due to the drop-in profitability and production of the industry, according to the 2024 Budget presented by Finance Minister Enoch Godongwana on Wednesday.
The Budget revealed that the projected tax revenue shortfall for the 2023/2024 financial year is R56.1 billion, of which R39.2 billion, or 50%, is attributed to the mining sector.
The mining sector’s tax receipts fell by half in the first ten months of the fiscal year, compared to the same period in the previous year, as the industry struggled with lower commodity prices, especially for platinum group metals (PGMs) and coal, and the disruptions caused by load shedding and poor rail and port services.
The Minerals Council South Africa, which represents the mining industry, welcomed the Budget’s focus on fiscal discipline and social and economic challenges, but expressed concern over the lack of investment in public infrastructure and structural reforms.
The Council’s Chief Economist, Hugo Pienaar, said the mining sector needed faster growth of private and public sector fixed investment and rapid implementation of deep structural reforms to allow the private sector to participate in key areas of the economy.
He also said the mining sector needed reliable and affordable electricity supply, efficient and competitive rail and port services, and a conducive regulatory and policy environment to remain globally competitive and sustainable.
The Council’s CEO, Mzila Mthenjane, said the mining sector was committed to working with the government and other stakeholders to address the challenges facing the country and the industry.
He said the mining sector contributed to the social and economic development of South Africa through job creation, skills development, community upliftment, and tax payments.
He said the mining sector also had a positive impact on the environment and health and safety of its workers and communities.
He said the mining sector hoped that the 2024 Budget would pave the way for a recovery and growth path that would benefit all South Africans.

Source: Mining Review Africa