Esteemed economist, Dr Roelof Botha, says it will be all systems go when South Africa’s surface miners return to work in the beginning of 2021, as the strong recovery continues since the end of hard-lockdown and pushes demand for building materials to new heights.

He says nearly all major building and construction indicators show a V-shaped recovery which translated to rising demand for materials such as cement, sand, stone, dimension stone and other materials used in construction projects.

Speaking during a jam-packed webinar on behalf of surface mining industry association, ASPASA, that hosted more than 250 online delegates, he announced the findings of the Afrimat Construction Index which provides a snapshot of the surface mining, industrial and construction industries. It reflects a realistic picture of the industry based upon statistics and figures reported on a quarterly basis.

Main supplier

Afrimat is a broad-based supplier of construction and industrial minerals ranging from mining and aggregates, metallurgical dolomites, agricultural lime, concrete products (bricks, blocks and pavers) to ready-mix. It has also established a strong foothold in contracting services comprising drilling and blasting, mobile crushing and screening.

Underpinning the sentiment of Afrimat CEO, Andries van Heerden, that the company and the industry are in a strong position to grow, Botha pointed out that following the economic disaster caused by the pandemic, companies should not get drawn into managing the calamity that happened in April, but rather focus on recovery.

Andries van Heerden (left) and Dr Roelof Botha (right) during a webinar hosted by ASPASA.

“All indications are that we are experiencing a V-shaped recovery that means that as quickly as the market collapsed, it is recovering. The Rand is recovering, bonds are bouncing back and the outlook is looking brighter by the day,” Botha said. He added that although the Rand is expected to remain volatile we expect it to continue strengthening as the pandemic tapers comes under control.

Reality based

According to Botha, fear factors such as the GDP to debt ratio climbing is to be expected and is not unique in the world. “But, compared to many other countries, including some developed ones, ours is manageable and fundamentals are in place to recover. And the V-shaped recovery in South Africa is not unique either, it is happening in all world economies. With increasing demand, commodity prices are also increasing in a V-shape recovery which spells good news for the mining industry.”

“It is also reflected in overall mineral sales which are at all-time highs. The same trend is reflected in retail and wholesale trades driven by construction materials, agriculture and resources. As a result of all these factors the JSE All share Index also reflects the V-shaped recovery. Fortunately for the population it is not only mining that is doing well although along with agriculture, services and the digital industry, have been the saviours of the economy throughout the pandemic.

Added to these sentiments is the good news of Government’s large-scale Covid-19 relief projects which will kick-off with 62 large infrastructure projects worth hundreds-of-billions of Rands in an attempt to kick-start the economy and provide work for tens of thousands of employees. The private sector in many instances can also not afford to continue delaying some large projects and these can be expected to come into fruition in the new year. Overall, a good position for surface miners to be in,” Botha concluded.

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