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Whilst South Africa’s mining industry is world-famous, there is more to the South African economy than gold and diamonds. Described as the ‘industrial powerhouse of Africa’, South Africa’s economy has developed from one based largely on primary activities to an economy comprising a sophisticated services sector, too; all of which depends on energy, like industrial fuel oils, directly or indirectly. Learn more…
A mineral-rich country, it was mining that really put South Africa on the map. Following on from the gold and diamond rushes of the late 1800s, mining became the driving force for the South African economy, attracting prospectors and investors from all over the world, and triggering other economic development, for example manufacturing. Peaking in the mid-1970s, when high gold prices drove demand and mining’s total economic production was 21%, the mining industry still plays a central role in the South African economy, contributing 8% to gross domestic product and employing approximately 450 000 people, making it the world’s fifth largest mining sector in terms of GDP value.
An energy-intensive industry, some mines are powered by the electricity grid – in South Africa, mining uses 13% of Eskom’s output – while others have their own dedicated power plants, where heavy fuel oil powers generators. Diesel powers heavy duty mining equipment and other vehicles used in and around the mine, and down the value chain.
Back in the 1980s, manufacturing was the jewel in the South African economy’s crown. Since then, the industry has lost its lustre, due to a move towards a services economy, as well to intense competition for manufactured goods from the East. Nevertheless, manufacturing still accounts for a sizeable proportion of our GDP – around 13% – and employs over 1.6 million people. One of the strongest manufacturing sectors is the automotive industry, which accounts for 12% of South Africa’s manufacturing exports.
In addition to drawing power from the national grid, HFO is burned in furnaces at manufacturing plants to produce the heat needed for many manufacturing processes, and diesel is used in generators, equipment and vehicles throughout the value chain.
Blessed with a variety of landscapes and sub-climates, from sub-tropical to Mediterranean, South Africa produces an abundance of agricultural products, for both domestic and international consumption. Currently, South Africa is a nett exporter of food, producing more than it consumes, with a highly developed commercial agriculture industry. Agricultural exports comprise 5% of our country’s exports, and the industry employs 10% of the entire formal workforce and contributes 3% to GDP.
Diesel dominates the entire farm supply chain, powering more than 66% of all farm equipment involved in planting, tending and harvesting, 96% of all trucks and 100% of all trains and ships that get food to market. Agriculture and agro-processing, of course, also consume energy from the national grid and so is indirectly dependent on HFO, which is used by power stations in their generators.
Highlighted by President Cyril Ramaphosa as a growth industry in his State of the Nation address earlier in 2018, tourism directly contributes almost 3% to South Africa’s GDP, and has outperformed other industries in job creation, with one in every twenty-three workers now being employed in tourism – at nearly 690 000 people, that’s more than mining. But tourism’s economic reach stretches even further – these numbers don’t take into account workers indirectly employed by the tourism industry – for example, those working for airlines, bus or taxi companies (this falls under the transport sector), those working in restaurants and hotels (this falls under trade), or even those who fall outside the formal sector (for example, informal traders who make and/or sell curios).
Without fuel, it would be impossible to tour the world…Whether planes, trains or automobiles, petroleum products make our travel dreams come true!
At the core of every industry, a sound and stable power grid, and sufficient electrical generating capacity takes careful planning and investment. While challenges currently abound in this regard, Eskom plans to add an additional 20 000 megawatts of power to the grid by 2025, with the current dispensation working on rolling out measures to reverse the decline in the national power grid of the last few years. The power industry not only facilitates economic activity but, as of 2017, contributes 4% to GDP.
The electricity consumed in businesses and homes across the country is, in many instances, kickstarted by HFO. Power plants burn fossil fuels such as coal, gas or heavy fuel oil to produce electricity – with heat energy being transformed into mechanical energy, which in turn powers the electrical generators which give us electrical power.
SA Oil supplies industrial fuel oils to industry in South Africa and beyond – we travel in excess of 12 million kilometres every year to deliver our fuel products to some of Southern Africa’s biggest mines, factories and power plants. We also service the agricultural industry, supplying low sulphur and ultra-low sulphur diesel. Find out more about our products here…