BASIC MATERIALS

This sector comprises diversified commodity majors (BHP, AGL, GLN), focused and diversified commodity miners in SA (predominantly iron, manganese, coal), chemicals (SOL, AFE and OMN), as well as forestry, paper and packaging (MNP and SAP). Investment bound to the commodity cycle.

 INDUSTRY EXPOSURES

Business:  Macroeconomic and geopolitical volatility have disrupted energy demand and the speed and direction of the global transition from fossil fuels to renewable energy, affecting the suppliers of energy resources, as well as of energy-intensive processing. SA producers face carbon import taxes and crumbling infrastructure, notably from Eskom (electricity) and Transnet’s rail and port infrastructure.

Environment: While Climate change dominates the news and threatens to strand assets in this sector, extractive industries are also vulnerable to spills and pollution, and threats to water and energy supply. 

Society: Societal issue materiality for this sector lies predominantly in the supply chain, with stresses on the economy putting pressure on margins and consequently on the compact between labour and operations. High material issues include:

  • With nearly half a million employees in the sector, safety and the fair treatment of labour are key HR issues

  • Relations with communities surrounding operations suffering high levels of unemployment and poor service delivery from local municipalities

  • Security of land tenure in areas occupying indigenous homelands

  • Broad-Based Black Economic Empowerment legislation in SA, as well as DEI legislation internationally impacts on HR practices

Governance: Materiality largely stable from previous years, though changes in leadership have an impact on competence, depth and succession planning. Ethics an issue, especially for Glencore.

In this report

  • BHP (BHP)

  • Anglo American (AGL)

  • Glencore (GLN)

  • Sasol (SOL)

  • Kumba Iron Ore (KIO)

  • Exxaro (EXX)

  • South32 (S32)

  • Thungela (TGA)

  • African Rainbow Minerals (ARI)

  • Mondi (MNP)

  • Sappi (SAP)

  • Arcelor-Mittal SA (ACL)

  • Omnia (OMN)

  • AECI (AFE)

  • Montauk (MKR)

Price: $1295

Included:

  • Full 56-page report covering all 15 companies in the Basic Materials sector

  • Introductory in-person consultation, scheduled at your convenience; learn more about how to link FarSight scores with your valuation process, and get up-to-date answers to specifics on each company under coverage.