Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile on the Occasion of the Ground-Breaking Ceremony for the Jewellery Manufacturing Precinct and the Industrial Development Zone, Kempton Park
The Deputy Minister for Trade and Industry, Mzwandile Masina;
The Acting Mayor for Ekurhuleni Metropolitan Municipality, M.M.C Makwakwa;
The Group Executive Commercial from Airports Company South Africa, Mr. Haroon Jeena;
The chairperson of Gauteng Industrial Development Zone, Dr. Paul Jourdan; Mr Siphiwe Ngwenya, Group CEO of GGDA
Ms Seipati Mangadi, Project Executive of the Gauteng IDZ
Our valued partners from the dti, DMR, the State Diamond Trader, the South African Precious Metal Regulator, SARS and other key government agencies;
Members of the media; Distinguished guests; Ladies and gentlemen: Programme Director
According to a 2010 McKinsey Report titled “Africa’s Growth Path – Sector by Sector” the mining sector presents a paradox for our economies. The report states that although the continent is well endowed with mineral resources, mining has not been the consistent engine of economic development that people in many countries have hoped for. We can all agree, more so with the recent worrisome developments in the industry, that this statement embodies a reality that we have now fully internalised and must fiercely overturn.
Programme Director, mining’s unfulfilled promise to the continent is not only a blow to the dreams of generations of people who fought tirelessly for Africa’s economic emancipation but it is also a threat that requires political will and the implementation of targeted industrial policies aimed at using the sector as a launching pad for our continent’s industrialisation.
We are dismayed that the even with the reality that eleven of Africa’s nations, mostly in Southern and West Africa rank among the top ten sources for at least one major mineral, more than 50% of the continent’s exports are processed elsewhere to get their extra value. Long after independence, our economies are still commodity driven, with little signs of diversification and linkage development.
Programme Director, recent developments in the global economy have once more catapulted the observations made in McKinsey’s 2010 Report firmly into our discourse. The key lesson emerging from these developments is that our economies are effectively appendages to volatile global markets and particularly vulnerable to external shocks. We can all attest to witnessing this impact since the global economic crisis.
As a result of these developments and our own reflections, we are once again summoned to ask: how does Africa utilise its mineral resources to improve the lot of her people?
Ladies and gentlemen, part of our business today is to respond to this question. We share the UN’s Economic Commission for Africa Report sentiments that: “Africa can do better. Primary commodity production and exports entail huge forgone income through lack of value addition, the export of jobs to countries that can add value, and exposure to high risks due to dependence on the exhaustible commodities and fluctuations in commodity prices. Instead of relying on exports of raw materials, the continent should add value to its commodities to promote sustained growth, jobs and economic transformation.”
The Gauteng government believes that we can do better to maximise the gains derived from our natural endowments and today is essentially about demonstrating our political will to do better! This commitment finds clear expression in our vision for radical transformation, modernisation and re-industrialisation, which puts Africa’s industrialisation at centre stage.
Our vision rejects the notion that our resources are a curse and that these endowments must only play a marginal role in our industrialisation plans.
On the contrary, we firmly believe that Africa can industrialise by adding value to her mineral resources, using them to buttress new sectors of growth, new services whilst also enhancing our technological capabilities.
It is within this specific context that we are today marking the beginning of a groundbreaking initiative that directly responds to the need for structural transformation of our economy.
This Industrial Development Zone will give impetus to the implementation of South Africa’s national mineral beneficiation strategy – a strategy centred around the enhanced beneficiation of South Africa’s rich mineral resources.
Programme Director,
In delivering this address, it is only fitting that I elucidate briefly on the history of South Africa’s mining industry and the role it has and continues to play in the economy of our country.
It is no secret that the mining industry has historically been the backbone of South Africa’s economy. Although the sector’s contribution to South Africa’s GDP has declined since the 1970s, it continues to be an important component of the country’s economy. In this regard, Statistics from the Chamber of Mines, South Africa reveal that in 2013, the mining sector accounted for 8.3% of GDP directly; a downward trend from the industry’s peak in the 1970s when it was at approximately 21% of the country’s GDP. It is not surprising to observe the consequent decreased in the job creation potential of the sector in the country today – an aspect that is further compounded by its structural challenges and the global economic downturn.
Ladies and gentlemen, when the Gauteng Provincial Government resolved on the development of a Precinct to enhance beneficiation of mineral resources mined in South Africa, one of the driving motivations was on the ability of the province to play its rightful role in the enhanced beneficiation of minerals mined in South Africa. Indeed, at one point, this province was the world’s single largest producer of gold, being accountable for one-third of the entire stock of gold sourced globally.
Discovered in the 1880s, the Witwatersrand Gold Basin developed at an unparalleled rate that peaked at 53 operating mines and 1 147 tonnes of gold by 1970. With the success of gold mining in the country, organisations such as the Rand Refinery were established. It is therefore no surprise that Rand Refinery is perhaps the largest integrated single site precious metals refining and smelting complex in the world.
Programme Director,
Despite the success of mining gold and diamonds and even more recently, the Platinum Group of Metals, South Africa’s beneficiation capabilities have never really taken off in a manner that results in the country being ranked as the world’s major global contender in the beneficiation of various minerals. In this regard, the National Beneficiation Strategy indicates that gross revenue from sales of all minerals in South Africa amounted to just under R300b in 2008; similarly, just over R86b was generated from processing of base metals, precious metals and other minerals, representing only 11% of the total volumes of minerals produced. Without a doubt, this presents an opportunity for the beneficiation of minerals mined in our country.
In designing and planning for the development of the Jewellery Precinct, our focus is on the operationalisation of a globally competitive Precinct that will enhance South Africa’s ability to manufacture jewellery and the cutting and polishing of other precious and semi-precious metals, (including diamonds) for both local and global consumption. To this end, this Precinct will provide opportunities to both local and foreign investors who wish to operate at the Zone.
Because this development has been designated as an Industrial Development Zone, we believe that the investor attraction incentives packaged through the Department of Trade and Industry, coupled with our competitive location of being within the grounds of Africa’s largest and busiest airport, will go a long way in encouraging international investors to consider this Precinct as a destination for the manufacturing of high value low mass mineral products that can be exported to both African and global markets.
Beyond today’s event therefore, are ongoing engagements with various role players to ensure that this development will realise its fullest potential, also in respect of its job creation and local economic development capabilities, both of which our Commercial Case has revealed positive spin-offs on.
Building on the years of research and efforts that have gone into the planning for the first Industrial Development Zone focusing on mineral beneficiation in South Africa, our objective as Gauteng, is to ensure the development of a ‘sustainable, world-renowned and globally competitive’ Precinct that will provide a platform to local and international players alike, to efficiently and effectively manufacture and transport their finished products to all corners of the world.
With that in mind, our Value Proposition is based not just on our comparative advantage of being experienced in mining the inputs for use in end-products; our proposition is rather focused on ensuring that Gauteng provides a turn-key approach to beneficiation by ensuring that all linkages that will enhance mineral beneficiation are provided at the Zone and that the necessary support and assistance from government is availed to our investors, freeing them to focus on the business of manufacturing, thereby enhancing the creation of jobs and Gauteng’s contribution to the country’s GDP, of which we are a leader.
Ladies and Gentlemen, our country’s position as one of the world’s richest countries in mineral resources implies that it is upon us to ensure that the resources we have been endowed with as a country are not just mined, but are also used to enhance our economic and social development prospects.
We have a responsibility to ensure that mining’s unfulfilled promise becomes only a point of historical reference. We must derive our determination from Malcom X’s wise counsel that “the future belongs to those who prepare for it today”. Indeed there is no better time than now for us to embark on a project that will enhance the country’s beneficiation of our minerals, thereby creating a desired future state where South Africa becomes a global contender in jewellery manufacturing as well as the cutting and polishing of diamond and semi-precious metals, amongst others.
The desire for this ideal future state requires us to invest in the future. To that end, we see the Jewellery Manufacturing Precinct as a critical contributor to the realisation of that envisioned future state and look forward to the support of our stakeholders as we march ahead to ‘seize this moment’ in history. Our sincere thanks goes to all the partners, especially the Department of Trade and Industry, without whom this project would not have seen the light of day.
