Vice Chancellor and Principal of Wits, Professor Adam Habib
Charles Nkomo, Chairperson of the Wits Students Mining Engineering Society (SMES)
The leadership of the mining industry
Academics and students
Ladies and gentlemen.
It is an honour to be invited to address this conference. This is particularly so since the eyes of the world are focusing on this sector and its performance in development in this country, in Africa and indeed in resource-rich countries of the south.
The heaviest of responsibilities rest on our shoulders to get this right. We can afford no mistakes, miscalculations or mediocrity in tackling the vast job that confronts us. We must all pull together for success.
The fact that we are speaking to young people drawn from across four universities that offer mining engineering and mining geology speaks volumes about the seriousness with which you are taking your profession.
The fact that you have invited us here shows that you appreciate the role that the democratic government should play in regulating the mining industry that has played a key role in our country’s economic development over the past 130 years which has transformed South Africa into being the most industrialised country in Africa.
This university has been in the news recently for various reasons – great institutions do attract public attention. Recently we laid the mortal remains of one of the vice presidents of the United Democratic Front, Professor Ismail Mohammed, who defied the brutal apartheid repression and taught at this institution.
In fact, it was at his memorial service that Prof Habib apologised for the fact that apartheid sought to exclude sharp minds like Professor Mohammed solely because of their political courage.
In the same vein, what also caught my eye was a thoughtful piece that appeared in Business Day on Nelson Mandela Day written by the respected human rights lawyer George Bizos, one of the defence lawyers during the celebrated Rivonia trial. He wrote about Nelson Mandela, this university and what apartheid did to the lives of two budding students on this campus.
Bizos wrote: “…it was the things that Nelson Mandela and I could not do together that cemented our relationship far more than the things that we could. We met in 1948, ironically the year of the dawn of apartheid. We were reading law at the University of the Witwatersrand where the unbearable logic of the National Party invaded our lives in the most unthinkable ways.
Though we could occupy the same desk in the lecture theatre, we could not swim together in the pool. We could not sit next to one another at rugby matches. Because of the colour of his skin, Mandela could not join the soccer team, and he was barred from entering the gym to work out in the boxing ring, his favourite sport of all. Of course the inhumanity of apartheid put a halt to much more than jolling and sports, but as two young friends of different colour, we could generally not be seen together in the regular walks of life.”
Bizos describes the harrowing events that came with the formalisation of apartheid in 1948. We have moved on since then. So has Wits, which had such deep roots in the mining industry, This university is a different place now and is run by people with the requisite academic and progressive orientation.
There is a tendency by some to view the mining industry through the prism of what happened at Marikana and to draw conclusions that do not have a bearing on the reality of the situation on the ground.
We all know that the mining industry was hit by a set of unprotected strikes in 2012 which affected the platinum, gold and iron ore sectors. At the core of these strikes were factors such as high growth in urbanisation, service delivery challenges, as well as high levels of poverty all of which created a situation where billions were lost in production and sales during this period.
All of these are happening at the time when the largest component of mining, platinum mining, is experiencing a period where about half of the industry is being marginal at current prices as a result of, among others, the recycling.
We have to accept the reality that this reflects the ups and downs of the cyclical nature of the mining industry, which has been at its lowest ebb since 2008. The protracted global economic and financial environment, compounded by the persisting recession in our traditional markets in the Eurozone have collectively conspired to place our mining industry under severe pressure.
The decision of the ANC NEC to call on the President to set up a Task Team on the economy is a reflection of the fact that my organisation and the government it leads are alive to the fact that we are facing the most difficult period for our economy since democracy came in 1994. I am confident however, that the challenges are essentially temporary.
Our President, Honourable Jacob Zuma, promptly assigned the Deputy President, Kgalema Motlanthe to lead a tripartite process, whose mandate is to restore calm, order and confidence in the mining industry. The process has culminated in the framework agreement for sustainable mining industry amongst all stakeholders, in which these groups committed a set of individual and collective actions to urgently find enduring solutions.
The action plan for the framework is a subject of finalisation and we have all the confidence in the strength of the collective with a common objective. When I met investors in London only last we there was strong sentiment among these traditionally cautious group of people that “there is no place in the world which has such a strong culture of tripartism as South Africa.”
These investors, to this day, praise the same spirit of tripartism that prevailed when we had a gold crisis and the role of this spirit in saving thousands of jobs in 2008. After all it is not the first time we have done this. It was after all the ANC that worked with the congress alliance and formulated the Freedom Charter in 1955 which among others stated that the minerals beneath the soil belong to the people as a whole.
When we passed the MPRDA we did exactly what the Freedom Charter called us to do. These minerals were placed in the custodianship of the state wherein our people are the beneficiaries.
It is the same ANC that pulled our country from the brink of the abyss in 1986 when the leadership realised peace and not war would best serve the interests of our country.
These current challenges facing this industry are not and cannot be permanent. They are cyclical. As I said in my budget speech, if one casts our eyes further away you will see the medium to long term outlook of the mining industry looks extremely attractive. I am prepared to say now, without equivocation, that there is a bright future for young people such as yourselves in this industry. You have not chosen the wrong profession.
Mining has been an integral part of human existence since time immemorial. You are in the right profession as this is unlikely to change. Despite the short term volatility, I am pretty confident that the long- term fundamentals are in place for the continued growth in commodity demand.
The trends in urbanisation and industrialisation in China, India and other emerging markets, including Africa, will add almost 3 billion people to the world population by 2 050. This massive window of possibilities will require significant quantities of minerals to support it. This gives concrete expression to the saying “if it can’t be grown it has to be mined”.
Technology is an important issue to which we will continue to pay attention as we mine deeper and deeper. We need to develop and keep up with the latest technological trends as we extract these resources. In this regard we will continue to invest in state research institutions like the Council for Geoscience, Mintek, CSIR and others in order to ensure that we have a mining industry that is responsive to the challenges of the 21st century.
The role of institutions of higher learning and in particular our universities, cannot be overstated in research and technology development.South Africa has recently been confirmed as the wealthiest mining jurisdiction in the world with an exploitable lifespan of well over 100 years ahead. This must give you the reassurance that this industry will continue to play a critical role in the national economic environment.
As government, together with our key stakeholders, we have developed a mining sector strategy that seeks to position the industry along a path of sustainable development and meaningful transformation. The two attributes of this strategy are not mutually exclusive, but more reinforcing of each other.
In our determination to broaden the scope of opportunities inherent in the mining industry, we have developed the mineral beneficiation strategy, which will give impetus to our national industrialisation programme.
This is the implementation of our policy positions contained in all policy proposals and conference resolutions of the ANC since 1990. We took these positions because we wanted to reverse the trend where we export raw materials only to return them as finished products.
I invite you to explore and leverage this opportunity for your technical prowess, entrepreneurship, and seize the opportunity to contribute to nation building and employment creation. Government, on its own, cannot create an enabling environment for your innovative minds to excel.
I call on all of you to play your part in assisting the government to ensure that we continue to build on the post 1994 regulatory framework. In doing so, you will be part of the South African dream of striving for economic prosperity, job creation and transformation, which are all consistent with the provisions of our Constitution.
You will continue to be part of an industry that has transformed our country into one of the most industrialised on the continent. Mining contributes 9.6 percent to our GDP, with coal dominating revenues at 24 percent, followed by PGMs’ 23 percent and gold’s 19 percent.
The figures are impressive. In 2012 mining’s contribution to Gross Value Added (GVA), amounted to R263 billion, with mining exports amounting to R269 billion, accounting for 35 per cent of the country’s total exports of goods to the rest of the world. In the last five years, gross fixed capital formation (GFCF) increased significantly since the promulgation of the MPRDA, from R40 billion in 2007 to R75 billion in 2012 (Data source: South African Reserve Bank). Foreign Direct Investment grew from R332 billion in 2007 to R389 billion in 2012. Gross primary mineral sales appreciated from R221 billion in 2007 to R363 billion in 2012, whilst the number of operating mines has increased from 1 414 in 2007 to 1 637 in 2012.
The sector employs 2.9 percent of the total workforce in the country. Employment grew from approximately four hundred and ninety five thousand in 2007 to five hundred and twenty five thousand in 2012, dominated by PGMs, accounting for 37 percent of total industry employment, followed by gold’s 28 percent and coal’s 13 percent. Amongst the (historically disadvantaged) HDSA individuals, women, particularly black women, were the most affected parties by socio-economic discriminatory practices of the past. The number of women employed in the industry almost doubled, from 24 659 in 2007 to 48 420 in 2012, representing 9.2 percent of the workforce in the sector.
It is on the strength of our vast mineral resources, our predictable legislative framework, our competitive industry, our skilled workforce, our research capability and our stable macro-economic fundamentals that we base our optimism about the sustainability of the mining industry. It is full of opportunities for job seekers, entrepreneurs and investors.
Challenges emanating from our past still remain, as shown by the uneven progress we have made in fully achieving the objectives outlined in the MPRDA and the Mining Charter, which will be assessed in 2014.
With the skills undoubtedly residing in this hall, we can realise the objectives outlined in the National Development Plan, aimed at creating a productive society and finally banishing illiteracy and poverty.
You can be pioneers and torch bearers, inter alia, of the campaign of the leadership of the ANC youth league that has boldly proclaimed that it is cool to go to varsity and get a degree.
As a youthful nation, I am more confident that the future of this country will be in good hands and that the legacy as well as the vision of the “Mandela Class” of Leaders that is inscribed in our society will be bequeathed to posterity.
In conclusion, we, all in our own ways, can play our role in improving the lives of our people for the better. We can do so from the vantage of different places: We in government and you in the institutes of learning and in various companies for which you will eventually work. You will do it your way and with your own approaches and opinions, but in a national cause that is crucial to our country’s future. I wish you well in all your future endeavours, and thank you for this chance to address you.
I thank you.
