Where have all the JSE listed mining companies gone?
Updated: May 27, 2021
By: Paul Miller
In anticipation of next week's Junior Indaba virtual conference I took the time to update AmaranthCX's statistics on the change in the number of listed mining companies on the JSE over time.
It is not a pretty picture.
At the end of 1994 there were 118 mining companies listed on the JSE. By 2010 there were only 69.
Since 2010 there has been a 10-year streak of year-on-year decreases in the number of listed companies. So far in 2021 we have seen one delisting and no new listings, leaving just 39 listed companies. However, of those 39 companies, 5 are suspended zombie companies that will probably never see trade on the boards again and 7 companies have no mining assets in South Africa. This leaves 27 listed mining companies on the JSE that still hold mining assets in SA. None of the 27 are pure exploration companies or "juniors" in a Canadian or Australian sense - and none appear to be involved in greenfield exploration.
What is interesting is that in AmaranthCX's database we track about 100 mining groups that hold one or more of the 400 or so commercial scale operating mines in South Africa - excluding industrial and construction minerals or alluvial diamond operations. This means that on a simple count most SA mines are owned by companies that are not listed in SA. Some of these companies are listed abroad, however it is safe to say that the majority of operating mines are now held by private companies.
One of the consequences of the increase in privately held mines relative to publicly held mines is the decrease in transparency and access to information about mines and therefore the mining industry as a whole. Private mining companies, despite having significant impacts on the environment and society, have no ongoing routine disclosure or integrated reporting requirements to society as a whole.
We see this especially in the coal industry - where public companies have been disposing of their coal assets to private companies. 15 years ago 90% of South Africa's coal was produced by listed companies, with all the public disclosures and governance that that entails. Now I'd hazard a guess that about 50% of South African coal is being produced by opaque private companies. This lack of transparency cannot be a good outcome of the move away from coal.
I'd suggest that perhaps all mining companies, other than artisanal and small scale miners, should join listed companies and state owned entities as Public Interest Entities with all the disclosure and audit requirements those require.