The Decline of the South African Economy

The Decline of the South African Economy

Edited by Stuart Jones

South Africa’s leading economists adopt within this volume a sectoral approach in their analysis of the drastic changes that have occurred within the South African economy since 1970. The book illustrates how, despite its sophisticated infrastructure, the South African economy has shared in the economic decline – resulting from misguided economic policies – that has been the experience of Sub-Saharan Africa.

Chapter 5: The mining sector, 1970-2000

Stuart Jones

Subjects: development studies, development economics, economics and finance, development economics


I THE YEARS OF TURBULENCE, 1970-1990 Stuart Jones 5.1 INTRODUCTION In the last three decades of the twentieth century the mining industry’s contribution to the South African economy fluctuated dramatically. After experiencing a steady erosion in its contribution to GDP in the 1960s, from 12.7 per cent in 1960 to 9.0 per cent in 1970, the decade of the 1970s witnessed an abrupt reversal of this trend and by 1980 mining’s share of GDP had risen to 21.5 per cent. This then declined to 9.7 per cent in 1990 and 6.5 in 2000. The decline in the 1990s was faster than that of the 1960s and by 2000 mining’s proportion of GDP was at its lowest level since the formation of the Union in 1910. Mining’s importance to the economy did not decline as fast as its contribution to GDP, because of the key role it played in supporting the balance of payments by earning foreign exchange. In these two decades, 1970-1990, the mining industry experienced first a boom in gold mining, as a result of the gold price rise in the 1970s, and then a slump, as a result of the fall in the gold price in the 1980s. Coal exports became a major feature of the 1980s, while platinum was steadily increasing in importance. Job reservation remained throughout the 1970s and 1980s but the prohibitions on trade unions fell away in the 1980s. Concurrently with these developments foreign labour in the gold mines was replaced with local South...

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