The impact of mining on the South African economy : an empirical review
Date
1999
Authors
Stilwell, Lancelot Charles
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Abstract
Many people and organizations, including the government, claim that mining is the cornerstone of the South African economy. However, no documentation of either the inter-sector or the intra-sector relationship of the mining industry with the rest of the economy exists to support this claim.
The purpose of the research undertaken in this thesis is to evaluate and quantify
these relationships, during the period 1971 to 1993, using input-output
multipliers.
The conclusions reached are that:
(i) Increased output from mining activities did not have the greatest mean
impact on GDP.
(ii) Income generated in mining activities had a significantly less mean
impact on GDP than did income generated in the majority of other
sectors.
(iii) Increased output from the mining activities did not have the greatest
mean the impact on employment.
(iv) Increased employment in the mining industries had a significantly less
mean the impact on employment than did employment in the majority of
other sectors.
(v) The sector that consistently benefited the most from increased mining output was "wholesale and retail trade and motor trade". None of the
heavy manufacturing industries benefited significantly from increased
mining output.
(vi) The impact, of increased mining output and increased employment in
the mining activities, on suppliers of intermediate input, was less than
the mean impact of the whole economy.
The mining industry does generate large flows of income, but this income does not benefit the economy to the same extent as several other sectors. The thesis supports a previous study that found that the forward linkages between mining and the rest of the economy are indirect and through the world economy. Finished products are imported to facilitate the export of raw mineral resources, which is the driving activity of the economy.
It is not possible to determine the individual importance of minerals other than coal and gold. "Other minerals" should be segregated in future Tables.
Neither GDP nor input-output tables take any account of the depletion of natural reserves. This is an important limitation on their use as an indicator of income in a minerals abundant economy and is an area for further research.
Description
A Thesis submitted to the Department of Mining Engineering in the Faculty of
Engineering at the University of the Witwatersrand, Johannesburg, in
fulfillment of the requirements for the degree of Doctor of Philosophy
Keywords
Mines and mineral resources -- South Africa., South Africa -- Economic conditions.