BMI's Executive Summary

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Accounting for nearly one-third of South Africa's total exports, mining can be described as a vital industry for the country's economy. South Africa hosts the world's largest deposits of gold and about 80% of the global platinum reserves. It is also a significant producer of diamonds. But the country's mining industry is observed to have matured and the pace of mineral exploration has fallen over the years. Even though South Africa still ranks among the world's foremost mining nations, it needs to take note of the rapid depletion of its mineral base. Especially gold, which has been major driver for the industry, has seen a consistent contraction. Further, continuous strengthening of the rand has made investments into the country more expensive – constraining its growth. International mining players now look towards other destinations for better and cheaper mining opportunities. But what may be seen as a respite to the mining industry is the gradually expanding population of junior mining companies that may hasten exploration in the wake of surging metal prices.

In order to promote its domestic diamond cutting and polishing industry, the South African government has passed a bill that levies 5% export duty on rough diamonds that cross the borders for processing elsewhere. The government is also in the course of revising its other mining laws to make them more investor friendly. Revision of royalties on different metals and minerals is one of the most important amendments that can be expected to be implemented by 2009.

Industry Forecast

A strong currency, depleting resources and sluggishness in the pace of exploration of metals and minerals will be responsible for the country's mining industry growth rate veering south over 2007-2011. However, platinum production can be expected to serve the role of industry course correction. Accordingly, this report forecasts the South African mining industry to log an average growth rate of 0.47% during 2007-2011 to reach a value of US$18bn in 2011.

Chapter 1 - Executive Summary

Chapter 2 - Industry Trends And Developments

Market Overview

Revolving Door Syndrome

Regulatory Structure

Chapter 3 - Project And Property Updates

Metals

Minerals

Precious Stones

Table: South African Mines

Chapter 4 - SWOT Analysis

South Africa Political SWOT

South Africa Economic SWOT

South Africa Business Environment SWOT

Chapter 5 - Business Environment

Introduction

Regional Overview

Table: Regional Ave. Scores 1

South Africa: Business Environment Ranking

Table: Business Environment

Legal Framework

Independence Of The Judiciary

Effectiveness Of System

Property Rights

Intellectual Property Rights

Corruption/Red Tape

Labour Force

Table: Employment Indicators

Foreign Investment Policy

Table: South Africa

Political Environment

No Clear Front Runner

Chapter 6 - Industry Forecast Scenario

Metals Price Outlook

Risks To Outlook

Global Industry Overview

Regional Analysis

South Africa Industry Forecast

Table: South Africa – Mining Industry Forecast

Chapter 7 - Competitive Landscape

Chapter 8 - Company Monitor

Lonmin Plc

Anglo American Plc

BHP Billiton

Chapter 9 - Appendix A: Mining Ratings: Methodology

Introduction

Breakdown of Ratings

Breakdown of Components

Chapter 10 - Appendix B: The World Economy

Outlook and Risks

Table: Global Assumptions

United States

Soft Landing Ahead

Risks To Outlook

Europe

Moderating, But Solid Economic Growth

Medium-Term Growth Outlook

Japan

Japan In 2007 & 2008

Japan’s Medium-Term Prospects

China

China In 2007 & 2008

China’s Medium-Term Prospects

Commodities

Oil

Chapter 11 - Appendix C: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn