• Jacques Erasmus. Picture: KPMG GLOBAL

KPMG in SA will launch its mining risk survey on February 4 2016. This comes after the firm hosted the first Mining Executive Forum in SA in September 2015.

Following 10 successful KPMG Mining Executive Forums held in Canada, the inaugural Africa version of the forum was held in Johannesburg under the theme “Fit for Future” to unpack challenges and provide a platform for stakeholders to discuss tangible and credible long-term solutions and benefits.

From the forum, KPMG conducted a mining risk survey with more than 80 C-suite delegates that were at the forum. Viewers of the survey will learn that uncertain regulatory framework, weaker commodity prices, increased working costs, constrained infrastructure and high labour costs coupled with poor levels of productivity and strained labour-management relations are some of the challenges that have placed SA’s mining industry in dire straits.

KPMG’s head of mining in SA, Jacques Erasmus, says that despite SA not being in the best space from an economic perspective and being fraught with political issues and industrial challenges, there is still room for optimism about the future as well as opportunities available in the country’s mining sector.

“The long-term economic fundamentals of the industry are still strong. For thousands of years, mining has been the key engine propelling the development of civilisation and mining is still most important in the technically advanced global community,” says Mr Erasmus.

When making comparisons between the South African and North American survey results show how different perceptions can be between regions and how much the stability of the local economy affects the risks executives focus on. While six of the top 10 risks overlapped between the two regions, they appeared in a different order and there were some large differences. In both regions, the survey results reinforce the importance of having a robust enterprise risk management process that identifies emerging risks to deal with a complex web of issues at company level.

The top risks once again demonstrates and highlights challenges that the African and more specifically the South African mining industry finds itself in. Ever-changing legislation and the inability of local government to deliver basic services to mining companies adds to the challenging environment.

“The fact that African executives are still facing challenges linked to emerging economies is not surprising and it is something we expect to see for several years. It does, however, illustrate the importance of collaborative engagement between mining companies, the government and labour,” says Mr Erasmus.

The survey results also showed that mining executives are still focused on ensuring that the fundamentals are secured and managed at their mining companies. This compares with KPMG Canada’s Annual Mining Executive Forum in North America where survey results suggested that executives may be starting to look toward the future even though external business conditions such the global economy, commodity prices and equity markets remain volatile.

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