Creamer Media’s Real Economy Year Book has been divided into separate reports under the banner Real Economy Insight, and investigates key developments in the automotive, construction, electricity, oil and gas, road and rail, steel, water, manufacturing, pumps, coal, gold, iron-ore and platinum sectors. This five-page brief is a synopsis of key developments in the gold sector over the past 12 months. It provides an overview of gold’s performance in 2020 and whether gold will continue to dazzle in 2021.

How to recover from the global Covid-19 pandemic continues to occupy the minds of business leaders and policymakers. There is growing consensus that it is simply not good enough for economies to ‘bounce back’ and return to their previous development pathways. ‘Bouncing forward’, however, will require companies and governments to adopt strategies and policies that begin to repair the health, supply-chain, social, environmental and climate fault lines that have been distressingly exposed during the pandemic. For countries, such as South Africa, where these fault lines were already deeper and wider before Covid than in most other countries, the nature of the recovery will be as important as its pace. This Real Economy Yearbook points to the fact that across just about every sector featured, from automotive to mining, there is an acceptance that a different approach is needed if the foundations are to be laid for more socially, environmentally and economically sustainable industries. For South Africa, these transitions represent not only a great risk but also a tremendous opportunity.

Iron-ore miners faced a tough 2020, as the Covid-19 pandemic spread worldwide, negatively impacting on the supply of and demand for iron-ore. Nevertheless, the iron-ore miners, along with the broader mining industry, have largely returned to normal operations and production. The iron-ore sector is also benefiting from high prices, allowing for a continuation in investment in expansion projects or new mines, particularly among miners based in Australia. In some regions, the prices are also driving an increased interest in exploration for iron-ore reserves. On the downside, the world is increasingly considering ways of decarbonising their economies and creating more environment-friendly and sustainable industries, with various steelmaking companies assessing potential projects to produce greener steel, which will require less iron-ore. Creamer Media’s Iron-Ore 2021 Report provides an overview of the global iron-ore market, with particular emphasis on supply and demand, as well as trade and pricing. It also provides information on South Africa’s iron-ore market, its major producers and iron-ore export infrastructure, as well as an overview of the major global iron-ore producing companies and other significant producers.

The Covid-19 pandemic has pushed the world economy into its worst downturn in decades, resulting in the steepest decline in steel demand since the global financial crisis of 2008/9. The national lockdowns, falling demand and supply chain disruptions owing to the pandemic quickly spread to key steel-consuming sectors, which had significant declines in output. Of the main steel-using industries, automotive and mechanical machinery have been affected the most; however, many other sectors that are important for steel demand, such as energy, have also been severely affected. Nonetheless, the World Steel Association’s Short Range Outlook for 2021 and 2022 indicates that the post-lockdown recovery in steel demand has been stronger than was earlier expected, with steel demand expected to recover to 1.87-billion tonnes in 2021, an increase of 5.80%. Structural changes are expected to accompany the recovery process, with a shift in the demand structure of steel-using sectors, including automotive, owing to electric vehicle transitions and new urban mobility patterns; and in construction, with new patterns of urbanisation, changes in urban planning and building designs, as well as investment in the energy sector. Overall recovery, however, remains fragile, owing to the waves of infections, continued physical distancing measures, elevated unemployment and weak confidence, as well as increasing concern about the timing of a demand recovery.

While a successful Covid-19 vaccine roll-out is considered as the most important driver of the recovery from the pandemic, infrastructure investment remains as urgent as ever and is increasingly viewed as key to creating forward economic momentum. Governments worldwide are preparing to invest trillions of dollars in new economic and social infrastructure to address backlogs and provide the basis for future economic resiliency, with some even seeing it as an opportunity to ignite this century’s own ‘roaring 20s’.  Special priority is being given to so-called green infrastructure to help countries mitigate and adapt to climate change, as well as digital infrastructure, which is seen as a key platform for generating and sustaining higher levels of future-proofed growth.  For South Africa, the social and economic infrastructure deficits are so large that it is not going to be possible for government to deliver these on its own. Fiscal stresses are not the only constraint, with all three spheres of government facing serious capacity deficiencies.  It is time for South Africa to adopt a stance identical to the one articulated by US President Joe Biden in March 2021, when he unveiled his proposed $2-trillion American Jobs Plan: “We can’t delay. We can’t delay another minute. It’s long past due.” 

Coal markets had a tough 2020. Demand collapsed as the Covid-19 pandemic swept the globe, gutting energy use and shutting down industrial activity. The pandemic came at a time when coal already faced a perfect storm of fast-expanding renewables growth, cheap natural gas prices and an increasing awareness among governments and investors of the need to reduce carbon emissions. What the future holds for coal is further clouded by the fact that many financial institutions and corporates have divested from the coal energy sector, while others have committed to reducing their investment in the sector and large coal miners are retreating from thermal coal mining. Further, United Nations Secretary-General Antonio Guterres has called on wealthy nations to end coal use by 2030, so that the world can meet its goal of reducing global warming and end the “deadly addiction to coal”. Creamer Media’s 'Coal 2021: What is the future of coal?' report reviews developments in South Africa’s coal sector and its prospects in the energy transition era, focusing on the business environment at home and abroad; it’s main participants and some of the smaller producers in the sector; as well as environmental considerations that have come to the fore.

Record-high gold prices, following the economic fallout of the Covid-19 pandemic, have left miners with plenty of cash, but they seem hesitant to immediately invest that cash in expanding output for fear of repeating mistakes made during a previous boom, when some investments failed to meet expectations. However, there is also a growing realisation in the industry that investment in growing reserves has been lacking and that new deposits urgently need to be discovered to ensure the future supply of gold. Creamer Media’s Gold 2020 report reviews the global and South African gold markets in this context. Globally, the focus is on supply and demand, and gold’s remarkable performance over the past few months. In South Africa, the focus of the report turns to rising costs and energy constraints in the sector, as well as labour challenges, the settlement of an historical class action lawsuit against the country’s major gold miners, and growing criminal activity in the sector. It also reviews the major and smaller mining companies with operations in South Africa.

The second edition of Creamer Media’s ‘Africa Mining Projects in Progress 2020’ report covers almost 40 African mining projects across Central, East, North, Southern and West Africa, all offering very compelling mining propositions, with several excellent prospects in the pipeline.

Owing to Covid-19-associated impacts, the World Platinum Investment Council forecasts that platinum supply in 2020 will be 14% lower year-on-year, at 7.10-million ounces, reflecting a 15% decline in refined production and a 12% decline in recycling supply on 2019 figures. The council expects demand to be 11% lower than the 2019 figure, at 7.43-million ounces, resulting in a deficit of 336 000 oz. Creamer Media’s Platinum 2020 Report considers these figures in light of the challenges that South Africa’s platinum group metals sector has been facing over the past few years, including unreliable electricity supply, coupled with steep and unpredictable tariff increases, as well as steep increases in the costs of other inputs such as labour and other essentials. The report also provides an overview of the global platinum sector.

The global mining industry has not escaped the impact of the Covid-19 pandemic and is facing a new reality, with measures to curb the spread of the virus impacting on economies, mining operations and their supply chains, manufacturing industries, the general public and, consequently, the demand for minerals and metals. Only time will tell if the economic impacts of the global lockdown on the mining sector are worse than the pandemic itself.