MINING’S SHARP REVENUE INCREASE

MBABANE – The mining industry is celebrating a notable resurgence.

Economic activity in the mining and quarry sub‑sector is said to have grown by 42.9 per cent in 2020, compared to a contraction of 12.5 per cent in 2019. This is as per the 2021 Economic Review Report released by the Central Bank of Eswatini (CBE). The sub‑sector continues to be dominated by coal and quarried stone production.

The combined sales revenue for mining and quarrying activities amounted to E363.2 million in 2020. It was a notable grow from E254.3 million recorded in 2019.
Growth in the sub‑sector is reported to have benefitted from positive developments observed in coal production. Coal production, which is mainly anthracite coal, rose by 47.2 per cent to 161 768 metric tonnes in 2020, from 109,926 metric tonnes the previous year. “The increase in coal production was supported by blending strategy that was adopted in previous years by the coal mine to combat the challenge of decreasing yields. “The blending strategy involved importing high yield unprocessed coal from South Africa and blending it with low yields coal mined in the country in order to achieve reasonable yields of above 50 per cent,” highlighted the report.

Increase

According to the report, coal sales revenue grew by 48.1 per cent from E214.6 million in 2019 to E317.9 million in last year, in line with the increase in saleable coal production. Notably, there were minimal disruptions in the production of coal arising from COVID‑19 pandemic during the year under review. Production of other minerals such as gold was muted, following the halting of operations in the gold mine throughout 2020 as the designated company underwent structural changes.

Quarried stone production, on the other hand, contracted by 24.3 per cent to record 210 024 cubic metres in 2020, from 277 425 the previous year. The decline in quarried stone production was a result of low demand for quarried stone by capital projects. Road projects such as the Big‑ Bend to Lukhula and Mpandze to Manzini roads purchased less quarry stone as they neared completion. In addition, the COVID‑19 induced lockdowns as well as disruptions in the supply of construction material affected construction activity, which, in turn curtailed demand for quarried stone in 2020.

However, total sales revenue for quarried stone increased by 15.2 per cent to E45.4 million in 2020, reflecting that, on average, there was an increase in prices for quarried stone. Meanwhile, the medium term prospects for the mining sector are said to be mixed. On the negative side, the continuous deterioration in geological conditions will significantly reduce coal yields in currently mined sites and will remain a big challenge for coal production.

Production

In addition, the production of other minerals was either stopped or delayed as investors struggle with cash flow and management related issues, dampening prospects for the sector. “There are positive considerations, however, in the medium term. The mining of coal on Crown land, where coal yields are significantly high, would prospectively increase coal production by more than two thirds in the short ‑ to ‑ medium term. Furthermore, prospects for mining coal in the Lubhuku area, primarily to support:

* A proposed thermal power plant, would also increase coal production in the medium to long-term,” shared CBE.
* Quarried stone production tracks developments in the construction sector,which in turn depends on the magnitude and pace of implementation for private and public infrastructure projects, particularly road infrastructure.
* Ongoing and planned infrastructure projects that could potentially benefit quarried stone production include major roads infrastructure such as the Manzini to Mbadlane and Nhlangano to Sicunusa roads. These also include prospective construction of dams for irrigation purposes such as those under the Lower
Usuthu Smallholder Irrigation Project (LUSIP II) and the highly anticipated Mkhondvo to Ngwavuma project where three major dams are earmarked for construction in the medium term.

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