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Precious metals lead SA forex take
Garth Theunissen
Posted: Tue, 06 Mar 2007
[miningmx.com] -- SOUTH Africa's automotive manufacturing industry likes to assert that vehicle exports are the country’s “new gold” – a claim based entirely on the fact that the automotive sector accounts for 7.64% of the country’s GDP while mining’s contribution has declined to just 6%.
What the automotive sector won’t tell you though is that mining is still a much bigger earner of foreign exchange.
According to Absa Capital Research, precious metals accounted for 26.9% of South Africa’s total exports last year, raking in R109bn for the economy. Similarly base metals accounted for 17% of total exports with earnings of R68bn while mineral products, mainly coal, accounted for 13.8% of total exports and earned R56.8bn.
 always confuse people  Click on image to enlarge
The Department of Trade and Industry (DTI) also points out that the average local content of exported vehicles was just 39% in 2006, marginally better than the 37% figure for the preceding two years.
In other words, even though total aggregate vehicle exports from South Africa was estimated at 179,859 units in 2006, just 39% of the components used in the assembly of these vehicles was produced in South Africa.
Another misleading claim by the automotive industry is the very assertion that the sector accounts for 7% of South Africa’s GDP. Although the 7% figure is accurate, it is not composed entirely of manufactured vehicles and components.
In compiling the figure the National Association of Automobile Manufacturers of South Africa (Naamsa) includes all the value added components of the broader retail motor industry. This includes such peripheral activities as sales of new and used vehicles as well as vehicle repairs and servicing.
Norman Lamprecht, Executive Manager at Naamsa, says that if the figure were confined to vehicle manufacturing then the contribution to GDP would fall to 4.6%.
Lamprecht argues that the reason this is not usually disclosed is to avoid confusion. “You always confuse people if you give them too much detail,” he says.
However, Lamprecht does point out that once the 2006 figures have been compiled the broader automotive sector (including the retail contribution) will increase to 8%, from 7.64% in 2005.
As an interesting aside, the Department of Minerals and Energy refused to divulge the monetary value of diamond exports from South Africa saying that De Beers, the monopoly that controls diamond sales from the country, would object if the figures were revealed.
“De Beers would probably complain to the Minister if we released those figures,” a source within the DME told Miningmx.
The DME would only reveal the total number of carats exported in 2005, which amounted to 15.77 million carats. Of these 14.34 million carats were non-alluvial diamonds, followed by 1.38 million carats of alluvial diamonds and 55,000 carats of marine diamonds.
However, according to Absa Capital Research, total diamond exports from South Africa in 2006 amounted to R16.64bn. This compares to total diamond exports of R16.82bn in 2005, R12.9bn in 2004 and R13.3bn in 2003.
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