This regionally optimised mega mine will lead to the creation of an operation of significan size, allowing for mining of the ore body in a continuous and sustainable manner.

Overview of operating environment

Economic environment

The world economy continued to exhibit clear signs of weakness during the year under review, as the unresolved sovereign debt crises in the Eurozone, the fiscal challenges in the United States and Japan, as well as a moderation of the growth momentum in a number of emerging and developing economies took a toll on business and consumer confidence around the globe.

World trade flows slowed considerably due to weak consumption and production activity in the most industrialised economies and softer demand for industrial commodities in fast emerging markets, principally China.

Real GDP growth for industrialised nations measured a mere 1.2% in calendar year 2012, whilst the pace of expansion in emerging and developing economies slowed to 4.9%, from 6.2% in 2011. The Chinese economy, for instance, recorded its lowest rate of growth in 13 years, at 7.8% in 2012. Despite numerous challenges, the rate of economic expansion in Sub-Saharan Africa remained fairly robust, with many commodity exporting economies managing to report strong rates of growth.


Adverse external factors and domestic developments affected South Africa’s economic performance during 2012 and underpinned the disappointing pace of expansion in the first quarter of calendar year 2013. Weak business sentiment is indicative of difficult operating conditions, with the international trading environment, especially European markets, being of particular concern.

The number of jobs created since inception of the NGP is 750 000. Despite these encouraging signs of improvement on the employment front, the current pace of economic growth is not having a sufficient impact on job creation and poverty alleviation. South Africa is struggling to reduce its extremely high unemployment rate, which stood at 25.2% in the quarter ending March 2013 – the equivalent of 4.6 million people without a job.

Consumer price inflation has edged higher since the final quarter of 2012 due to higher electricity and fuel prices, as well as a weaker currency. However, subdued growth in domestic household spending, which has ensured that demand-pull inflation remains under control, as well as concerns over modest economic growth and employment trends, have supported the Monetary Policy Committee’s decision to keep domestic interest rates at their lowest levels in almost 40 years.

South Africa’s short-term economic prospects remain largely unsatisfactory as a still fragile global recovery and unfavourable domestic demand conditions impact on growth. In this climate, gross domestic product is forecast to expand by just over 2% in real terms in calendar year 2013. The economic growth rate is expected to accelerate to an average of close to 3.9% per annum over the following four-year period as conditions normalise both locally and abroad.

South African exporters should brace themselves for yet another challenging year in 2013, considering a difficult trading environment in global markets.

Consumer spending is anticipated to report only a modest expansion in calendar year 2013, but faster rates of expansion in household expenditure are projected in subsequent years. Should global conditions gradually improve, investor appetite is likely to resurface. Home-grown challenges such as excess production capacity in various areas of economic activity may deter investor appetite in the near to short term, but the fixed investment momentum in the private sector is expected to accelerate considerably from 2015 onwards. The public sector, in turn, will continue to roll out its massive capital expenditure programme.

South African exporters should brace themselves for yet another challenging year in 2013, considering a difficult trading environment in global markets, particularly in Europe, and fierce competition from foreign producers. Nonetheless, a gradual improvement in export performance is anticipated over the medium term.

Substantial rand volatility is likely to persist over a protracted period, underpinned by factors such as the large deficit on the current account of the balance of payments, portfolio rebalancing by investors across the globe, risk concerns, as well as inflation differentials and global interest rate adjustments.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.

R13.1 billion
R16.0 billion
18 922
3 950
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