L Hendricks: Mining Indaba

7 February 2006

Honourable Ministers
Distinguished guests
Programme Director
Ladies and gentlemen,

I would like to formally welcome all of you to the 2006 Mining Indaba. I
would like to acknowledge the presence of my colleagues, the Ministers of
Mining from several African countries who are attending and participating in
this conference. As African Mining Ministers we have been holding very fruitful
discussions over the past few days during our African Mining Partnership (AMP)
meeting. I will speak on some of the outcomes of our discussions tomorrow
morning.

I would also like to welcome and thank all those who have travelled from
different parts of the world to be here. I also welcome our own local mining
fraternity.

The Significance of the Mining Indaba:

The Indaba, an international mining investment conference of note, has
evolved alongside our 11 years of democracy. It has grown in every way and as a
result we now need a bigger venue. The participation in this event by a greater
number of governments as well as local players, especially the new entrants,
has also increased, giving them an opportunity to network. There is still room
for the African junior mining sector to participate and benefit from this
conference.

We welcome the interest taken by international mining and investment
organisations in this event as it highlights and recognises Africa as a key
destination for mining investments. The mining industry’s potential to act as a
catalyst for growth and prosperity on the African continent, presents what is
arguably the industry’s most critical 21st Century challenge. Our continent
contains one of the world’s greatest mineral treasure troves and even though
our resources have been mined for more than a century, there are still
substantial deposits. With greater levels of peace on the continent and the
creation of a substantially more investment friendly business environment, we
are opening up the opportunities to invest in mining on the continent.

Developments in South Africa:

Ladies and Gentlemen, the South African government in recognising the
importance of the mining industry to our economy also saw the challenges and
the dangers created by keeping those resources locked in the hands of a small
minority. Over the past few years we have opened up the industry, and created
the scope for new players to enter this industry. We look forward to our mining
sector increasingly contributing towards the changing needs of the country.

Such changes are certainly in the area of black economic empowerment but
also and very importantly include value addition and beneficiation of minerals.
Our most recent legislation that was taken to Parliament late last year is to
encourage and facilitate greater levels of beneficiation.

Some of our legislation and changes have made us unpopular with certain
players in the business community, while others are sceptical about what we can
achieve. There should be no doubt that through our initiatives we are looking
at the long term interests of our country, and creating a climate that is
conducive for broader participation, greater levels of investment and economic
growth.

In all of our changes we are looking for greater private sector involvement
and investments. President Mbeki put it very aptly in his state of the nation
address last Friday when he said, “The years of freedom have been very good for
business. I believe that this should have convinced the investor community by
now that, in its own interest and as part of the national effort, it has to
invest in the expansion of that freedom.”

Ladies and Gentlemen, one only has to look at the delegates attending this
conference and those at the exhibition to see that our mining industry is
effectively positioned to make a substantially rewarding impact not only on the
South African economy but also beyond our national borders, particularly in the
rest of Africa. In doing so and in seeking these opportunities the principles
of social investment, community involvement, sustainable mining and good
corporate government should not be left behind.

One of the reasons why our domestic mining industry is well positioned to
invest in other countries is because it is unarguably the one of the most
successful business "clusters" within the South African economy. Thus our
mining sector includes more than just miners but also much of the value chain
around the mining industry such as finance, consulting engineers, world class
geologists, contract miners, component suppliers and product suppliers, etc. As
a country we also have excellent education and training facilities for the
mining industry. We should be very proud of what South Africa has achieved in
this sector and as government we are seeking to expand the value chain so that
it incorporates more industries in both the upstream and downstream of
mining.

While in recent years our mining industry has been challenged by the
contraction in gold mining, the mining of other commodities has been growing
considerably. Measured in terms of production, sectors such as coal, manganese
and chrome have grown considerably in size since the eighties. Platinum and
related metals are in a growth phase, with existing mines and refining capacity
being expanded. Interestingly the sales of branded platinum, which is
value-added, are rapidly increasing.

Most people are not aware that in 2004, for the first time, processed
minerals (Ferro-alloys and aluminium) have overtaken precious metals as the
main export earners. This growth reinforces our position on the benefits of
beneficiation of minerals.

To conclude, Programme Director, ladies and gentlemen, there are clearly
synergies in what South Africa has to offer and the need for greater levels of
investment in the mining sector in other African countries. I hope that all the
visitors from other Africa countries and our own junior miners will gain from
the networking as well as benefit from the opportunities which are created by
bringing together so many players in the sector. Importantly, we need to see
beyond mining activities and look at the possibilities created by value
addition.

Finally, I would like to congratulate the organisers of the Mining Indaba
for arranging what looks to be a successful conference.

I thank you.

Issued by: Department of Minerals and Energy
7 February 2006