South Africa's mining sector will continue to face headwinds from policy uncertainty regarding the passing of the draft mining charter, hindering the potential of a recovery since 2016 from becoming solid. We forecast the domestic mining industry value to continue to decline over the coming years.
Despite the recent rally in prices, Anglo American will remain committed to selling its Kumba iron ore mine in South Africa. Production of iron ore in South Africa is set to stagnate at 75mnt from 2017-2021, as iron ore prices gradually decline over the coming years and regulatory and infrastructure challenges persist.
Botswana's government's efforts to develop the coal mining sector will yield steady progress, supported by low operating costs, a solid project pipeline and rising domestic demand. Nonetheless, the government's coal initiatives within the context of reducing dependence on the diamond sector will face headwinds from subdued coal prices and the outsized value of the diamond sector.
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Thanks, BMI Research