Reporting provides transparency

CAPE TOWN. – The latest KPMG Mining Reporting Survey looks at how the African mining industry, faced with significant uncertainty, volatility and pressure for cost containment, has sprouted a number of reporting trends to provide shareholders with more transparency.

The survey is a bi-annual publication that looks at reporting trends in the mining industry as well as common business practices and also presents an analysis of the reporting of 25 industry-leading global mining firms.

Against the backdrop that the evolving business environment faced by the mining industry over several years has had a significant impact on reporting in the sector, the report looks at common trends within the industry as well as specific examples of how industry-leading firms are treating aspects of reporting.

Jacques Erasmus, the global head of mining for KPMG in South Africa, said the survey focused on estimates and judgments, valuation, non-Gaap (includes earnings before interest, taxes, depreciation and authorisation) measures, risks and other reporting trends.

“With all of that in mind, disclosures in these areas are becoming increasingly prevalent, as companies try to provide stakeholders with disclosure of the ‘critical judgments’ and estimates management is required to make.”

Bruce Bickinson, the head of mining sector at Webber Wentzel, said from the global perspective there was a positive uptick, however, from a South African view there was still a lot of uncertainty facing the sector.

He said the enemy was uncertainty in South Africa and with the country faced with factors such as unemployment and issues around government policies the country was seeing reduced investment in the mining sector currently, although South Africa’s neighbouring countries are seeing a fair amount of activity.

Charmane Russell, a spokesperson for the Chamber of Mines of South Africa, said mining remained a fundamental economic pillar for South Africa and continued to contribute to the country’s socio-economic development.

Russell said in 2015 mining contributed R286 billion to gross domestic product, sold metals and minerals worth R343 billion, paid taxes and royalties amounting to R16,2 billion, employed around 460 000 people directly and 1,4 million indirectly and direct employees earned R116,7 billion.

However, she said the South African mining industry continued to be under pressure. — Business Report.