South Africa looks to mining’s future


8 February 2016

“There is an ebb and flow to life; there are highs and lows. There are sunny days and grey days, summers and winters. The 2016 Mining Indaba comes at a time when the mining industry is in its winter season, a season which some have characterised as a crisis.”

With these words Mineral Resources Minister Mosebenzi Zwane opened the annual Investing in African Mining Indaba in Cape Town this morning. The Mining Indaba, as it is known, runs from 8 to 11 February, and is attended by the leading mining companies as well as juniors, government representatives, ministers and civil societies, mining engineers and others invested in the continent.

The indaba comes during a slump in commodities, with mines shedding jobs and mining houses cutting costs.

Yet ahead of the conference, Jonathan Moore, the managing director of the indaba, said that extracting and processing minerals in Africa – the world’s richest supply – was essential to manufacturing everywhere in the world. “We cannot stand still in a sluggish economic cycle. Focusing on how we will think, act and plan now will position us to take strategic advantage when the coming upturn begins.”

Speaking of his first few months in office, Zwane said he had met various stakeholders, who had indicated that regulatory certainty was necessary. In response, the government had prioritised the processing and finalisation of the Mineral and Petroleum Resources Development (MPRD) Amendment Bill as a matter of urgency “to entrench the necessary certainty”.

“We are also in the process of reviewing the Mining Charter. It is an important transformation tool and its targets remain applicable beyond 2014. The social and labour plan commitments constitute a critical component of restoring and sustaining the dignity of mineworkers and communities.”

Regarding stability, the minister also pointed out that in terms of the latest global competitiveness rankings, South Africa featured favourably with regards to financial market efficiency, transport infrastructure and property rights. “As government we will continue to create an enabling environment for investment and the ease of doing business in the country.”

Other issues brought up during consultations with stakeholders included labour stability. “Together we have created a stable mining environment through the presidential-led Framework Agreement for a Sustainable Mining Industry. There are now fewer disruptions in the industry, enabling operational activities to stabilise under the circumstances.”

Another concern was job losses and leaders in the industry convened under the Mining Growth, Development and Employment Task Team and committed to a 10-point declaration in an attempt to save jobs and ameliorate the impact of job losses. “I call upon captains of industry to deal with this matter responsibly, after proper consultation with all affected stakeholders, especially the workers,” Zwane said.

“Some of you indicated that restructuring was inevitable for the sake of ensuring sustainability for your businesses.

“You indicated that empowerment and transformation of the industry was taking place at a very slow rate. Our quest for inclusive economic growth – including empowerment of women, the youth and other members of vulnerable groups – is designed to help us achieve the type of society where everyone has a better life. We will provide requisite support for this new generation of miners, which we anticipate will be characterised by junior to mid-tier mining companies.”

Restructuring of assets must be done in a respectable and responsible manner that also assists in the empowerment of our people.

Turning to research and development, he said the government was investing in the sector throughout the mining, minerals and upstream petroleum value chain. “We are investing in the pre-competitive exploration phase in which the state through the Council for Geoscience is being resourced to apply the latest technology in order to enhance exploration interest. Our goal is to substantially increase the share of the global exploration expenditure.”

Regarding health and safety – particularly in light of the ground collapse at Lily Mine in Barberton on Friday, 5 February, in which three miners are still trapped underground – the minister said great strides had been made in ending fatalities, and the lowest statistics were recorded in 2015. A Mine Health and Safety summit in November would review current commitments.

However, speaking at press conference following his opening address, the minister pointed out that unions also needed to be on board with safety issues as “some fatalities are caused by worker negligence”.

In concluding his opening address, the minister turned to diversification into other new areas of exploration, which stakeholders in the industry had said was necessary.

“South Africa has relatively good prospects for upstream oil and gas development, including shale gas. We are encouraged by the level of interest expressed in in this emerging industry and the government has already strengthened the regulatory framework relating to oil and gas development.”

Speaking at the press conference following his speech, he said three companies had made five applications for hydraulic fracturing for shale gas in the Karoo. The government was “looking at those applications”, he said, but would not be drawn further.

The African continent was indeed the right address for investment directed towards mining and minerals development in line with the African Mining Vision, he concluded. reporter