Minister Mosebenzi Zwane: 2017 Mining Indaba

Opening address by Mineral Resources Minister, the Honourable Mosebenzi J. Zwane, on the occasion of the 2017 annual investing in African Mining Indaba, Cape Town, South Africa

Organisers of the 2017 Mining Indaba,
The new Managing Director and our Programme Director, Mr Alex Grose,
Co-Programme Director, Mpho Makwana,
Fellow Cabinet Ministers of the Republic of South Africa,
Deputy Minister of Mineral Resources, Hon. Godfrey Oliphant,
Chairperson of the Portfolio Committee on Mineral Resources, Hon. Sahlulele Luzipho,
Chairperson of the Select Committee on Land and Mineral Resources, Hon. Olifile Sefako,
Your Excellencies, Ministers and Deputy Ministers present,
Leadership of organised labour,
Captains of industry, and members of the investment community,
Representatives of civil society and communities,
Members of the diplomatic corps,
The investment community at large,
Media here present,
Distinguished guests,
Ladies and gentlemen,

On behalf of the government and people of South Africa, let me welcome you to our beautiful country, and to this year’s Investing in African Mining Indaba.

Mining and mineral resources have been central to civilizations for millennia, and this is expected to continue for the foreseeable future. It was the twin discovery of diamonds and gold, in South Africa in the late 19th Century that spurred on the establishment of a modern mining industry and our economy at large.

Though it has been 150 years since the discovery of the alluvial Eureka diamond, in the Northern Cape, mining continues to be a pillar of economic growth in South Africa. It contributes about 8 percent directly to South Africa’s GDP and just under 460 000 direct jobs. With an estimated 2.5 to 3 trillion US Dollars in non-energy mineral reserves still in-situ, we are looking forward to another 150 years of mining in South Africa.

We therefore invite the investment community and the mining industry at large to join us as we commence the next century of mining. As we move mining forward, let us take everyone along, and ensure that indeed the mineral wealth beneath our soil benefit all South Africans.

Also, our State Owned Mining Company (SOMCO) has been operating its first coal mine, and continues to contribute to the objectives of the National Development (NDP) which seeks to eliminate poverty, increase employment and reduce inequality by 2030. The company currently has a number of minerals under its portfolio.   

In August 2016, South Africa hosted the 35th International Geological Congress (IGC). I wish to express our sincere appreciation to the organisers and all the participants from across the globe for making it such a success.

The IGC also served to raise interest on prospectivity for mineral and upstream petroleum resources in South Africa through the application of new techniques in mapping. To encourage greater investment in prospecting and development, we have directed our Council for Geoscience (CGS) to work on a high intensity 10-year mapping programme to develop an integrated, multi-disciplinary geological platform  at a scale of one in fifty thousand [1:50, 000] nationwide. 

Special recognition is also given to the Organisation of African Geological Surveys (OAGS) which continues to facilitate cooperation between Geological Surveys and the attainment of the Africa 2063 development vision. In this regard, we congratulate Nigeria on their assumption of the Presidency of the OAGS. We call upon the international community to support the OAGS programmes.

When we met here last year, we reflected on the cyclical nature of mining, and the fact that we were in the winter season. At that time we predicted that the winter will come to an end, and that we should be better prepared for the new summer in the sector. There are now signs that we are entering a new spring. A new balance is emerging in the demand and supply for mineral resources. There has been a remarkable recovery of prices during the latter part of 2016, more particularly with commodities such as coal, iron, ferromanganese and zinc. These market dynamics need to be entrenched and supported by stakeholders working in concert to ensure the sustainability and resilience of the industry.

This year we mark the centenary of the former President of the African National Congress Comrade O.R Tambo, who would have celebrated his 100th birthday this year. The centenary is a reminder for us to continue to strive for the equality and shared economic growth which Comrade O.R and his contemporaries championed. In the mining sector, we must remain committed to the principle of shared prosperity and responsible investment. We ask the investment community to seize the opportunity to partner with black people, communities and workers meaningfully in their operations.

As I committed last year, government will do its part by ensuring an enabling environment for investment in South Africa. We have put all efforts in place to ensure that amendments to the principal mining legislation - the Mineral and Petroleum Resources Development Act - are processed and finalised as a matter of urgency. This process is well underway and public hearings are taking place towards the finalisation of the Bill. We expect it to be concluded by June 2017.

On the revised Mining Charter, the regulatory tool governing transformation in the sector, we have consulted extensively with stakeholders. The final Mining Charter will be gazetted by March 2017 and will be reflective of the views of stakeholders, in the interests of South Africa and provide for investor certainty. We call upon investors to come to South Africa and engage us frankly as we move towards transformation of our economy. We will continue to have an open door policy.

As a further contribution to creating an enabling environment for shared prosperity, the stability of industrial relations has been a focus of stakeholders. This was encapsulated in the Framework Agreement for a Sustainable Mining Industry, led by the President of the Republic of South Africa, His Excellency President Jacob Zuma, and signed by stakeholders in 2013. We welcome the peaceful conclusion of the 2016 wage negotiations in the platinum and coal sectors and see this as a sign of the further strengthening of relationships and systems put in place. We wish to thank all the stakeholders for upholding the spirit of the Framework Agreement during the negotiations period.

The government, also remains committed to enhancing the ease of doing business, and thus retaining the country’s reputation as a preferred investment destination. We have moved to improve regulatory efficiency through the integration of the applications for mining and related rights, water use and environmental permits.

We have established an Investment One Stop Shop, overseen by the Inter-Ministerial Committee on Investment. The One Stop Shop works to improve regulatory efficiency by providing multiple services from a single point, providing advice and addressing any blockages identified for those interested in conducting business in our country.

We have also established an integrated plan for economic growth and development, the Nine Point Plan which looks at cross-cutting issues such as infrastructure development, research, development and innovation as well as sectoral plans including mining and mineral beneficiation.

Beneficiation remains a priority in South Africa, and we are inviting investors and mining companies, to look to this as an opportunity for partnership and a mechanism for ensuring stable and growing demand for mineral resources. In this regard, we have developed a programme for Special Economic Zones, with an array of tax and investment incentives as well as bulk infrastructure to support the growth of mineral beneficiators. An example of this is the Musina Metallurgical Complex, in the Limpopo Province. We also have world-class institutions including Mintek, an entity reporting to the Department, that stand ready to partner with business in the development and adoption of competitive technologies and processing for beneficiation.

We welcome the positive manner in which investors have responded to this national imperative, and will continue work to strengthen enablers for beneficiation, including the security of supply of energy.

In our efforts to support investment in mining and beneficiation, we have a particular focus on the growth and promotion of small and medium sized enterprises. We are of the firm view that a new era of junior to mid-tier sized mines is upon us. The large mining giants of today had their genesis in the junior mining sector. We further believe that most job opportunities lie with small to medium companies, hence in 2017 we will be focusing on the Promotion of Investment, with a special focus on junior miners. We will continue to give them the support to enable them to thrive. We will further be hosting a an investment dialogue in Auditorium 2 at 14:00 today, looking specifically at junior mining, including potential projects, procurement opportunities as well as government and State-Owned Entity initiatives to support junior mining. We invite you to join us at that session.

An area which continues to receive priority attention is that of health and safety. The regrettable accident which occurred at Lily mine in Mpumalanga Province a year ago remains in our hearts and we will continue to toil to ensure that the families get closure.

The Department will continue to enforce the legislation consistently, and I have full confidence in the officials who administer these laws.

For mining to be sustainable well into the future, the industry must place greater value on the lives of workers. We collectively have the responsibility to ensure that each and every one of them remains unharmed, so Let us continue to be committed to achieving the goal of zero harm. We want to commend all the mining companies who have achieved the laudable milestone of operating for more than 12 months without any fatality during 2016.

We also remain ceased with ensuring that the illegal mining activities are prevented. In this regard, government will continue to collaborate with stakeholders in implementing the appropriate measures which will eradicate the illegal operations.

Closely linked to this element is the menace of illicit financial flows from the mining sector. Financial tools employed to avoid taxes and the fair share of mineral rents to the host governments only act to undermine the trust between stakeholders, and make for long term fragility of investments and the sector in South Africa, on the continent and globally. Let us work together to change the legacy of our sector and ensure that it is seen by all as a valued partner in development.

As I conclude, I wish to thank you for your continued interest in the mining sector of our country and continent. Your annual presence here is confirmation that South Africa remains a key investment destination for mining. Indeed South Africa is open for business, and I invite you to partner with us as we move the industry into the next century.

Re a Leboga.

Siyabonga.

Ndi a livhuwa.

I thank you.

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