Evaluation of productivity trends in the South African coal mining industry

Abstract

Productivity is an important topic within the mining industry and advances in productivity open up opportunities to make the best possible use of South Africa’s mineral wealth. The report uses publicly available data to assess trends in productivity in the SA coal mining industry since the 1980s and to compare SA’s performance with that of the US and Australia. It is found that between 1980 and 2003, productivity growth in the SA coal mining sector was primarily driven by capital deepening. However, productivity growth has been negative from 2004 onwards, despite continued capital deepening. Possible explanations include resource depletion, investment lags, deteriorating worker quality, increased complexity, more stringent safety regulations and adverse labour market conditions. The report highlights skills development and investment in innovation as possible ways of addressing declining productivity performance in the SA coal mining sector and recommends improvements to the availability of data for productivity research purposes.