Abstract
The study’s focus is based on the top ten (10) Johannesburg Stock Exchange (JSE) - listed mines
by market capitalisation and examines the relationship between risk disclosure practices and
financial performance and market value. Given the inherent risks in the mining sector, including
volatile commodity prices and evolving regulatory frameworks, the research investigates whether
enhanced transparency in risk management can positively influence financial outcomes, specifically
focusing on Return on Equity (ROE) as a proxy for financial performance. To achieve this objective
mixed-methods approach was employed, combining qualitatively assessing the maturity of risk
disclosures with quantitative panel regression analysis over a five-year period (2019–2023).
Integrated reports were evaluated using a Likert scale to assess the level of risk disclosures of mining
companies in accordance with the King IV and International Integrated Reporting Council (IIRC)
guidelines. Quantitative analysis involved pooled, fixed, and random effects models to statistically
explore the impact of risk disclosures on ROE.
Findings from the study indicate that mining companies with more comprehensive and mature risk
disclosures often correlate with higher returns on equity. However, the analysis further reveals that
while more mature risk disclosure practices contribute to enhanced financial performance, they are
not the sole drivers of improved ROE. Instead, the study concludes that other factors, including
corporate governance quality, market dynamics, operational efficiency, and broader macroeconomic
conditions must also be considered when evaluating financial performance. JSE listed mines with
limited risks disclosures tend to experience increased financial volatility and operational challenges.
Yet, even among mines with high disclosure standards, enhanced ROE results from the interplay of
multiple internal and external determinants. These results underscore the multifaceted nature of
financial performance in the mining sector, highlighting that risk communication is an important
element within a broader risk management framework. By integrating comprehensive disclosures
with sound governance practices and strategic operational improvements, companies can better
navigate the complex factors affecting profitability and sustainable growth.
In conclusion, this research contributes to the existing literature by clarifying the link between risk
disclosure and financial performance in a high-risk industry. It provides insights for policymakers and
industry practitioners seeking to refine disclosure practices and risk management strategies,
ultimately enhancing the competitive advantage and long-term suitability of South African mining
companies.