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Trends in mining reporting

- By Reshma Lakha-Singh

A public lecture to unpack key trends in the mining industry was hosted by the Wits School of Accountancy on 14 November 2014. Auditing firm, PricewaterhouseCoopers’ (PwC) Mining Centre of Excellence presented findings from their recent publication SA Mine: 6th edition.

The lecture included a detailed financial analysis of the industry, a review of corporate governance and financial reporting trends and an analysis of the use of integrated reporting, specific to the mining sector. Wits School of Accountancy lecturer, Warren Maroun dealt with the Environmental, Social and Governance reporting trends in the mining sector. “Research done by our Masters students indicate that there has been a general increase in social and environmental disclosures, however not so much in ethical disclosures,” says Maroun.

He added that interviews conducted with mining houses reveal that the integrated reports enhance the credibility of South African listed companies internationally. “However, a major risk is that board members are distant from writing the reports, leaving it up to consultants. It becomes a compliance exercise and results in excessive repetition.”

Jayne Mammatt, a Partner at PwC responsible for Sustainability and Integrated Reporting adds: “Integrated thinking is more important than integrated reporting. Long term viability is core to business strategy, performance and sustainability.” She stresses that the Integrated Report is the analysis and synthesis of performance versus the reporting and disclosure of information.

On unpacking the financial management of the mining sector, Andries Rossouw, Associate Director at PwC indicates that a major challenge for mining houses is the need to integrate risk and performance management. “There is also the need to evolve risk management to be more predicative in order to anticipate and plan for negative events, such as Marikana.”

He adds that the mining industry still adds significant value to the South African economy with regards to GDP contribution, employment, tax and export revenues.  “Leadership will be required from all stakeholders to ensure long-term optimisation of the industry as opposed to the threat of instant gratification claims by stakeholders.”

Preliminary research on Marikana and the impact it has had on the South African economy will be released in 2015 by the Wits School of Accountancy.

The SA Mine: 6th edition can be found online here.