Honourable Ministers,
High Commissioner of Australia,
Members of the diplomatic community from Australia, Zambia and Chile,
Distinguished representatives of organised labour,
Distinguished representatives of organised business,
Non-governmental organisations; and
Senior government officials
I wish to extend my warm welcome and appreciation to all present at this important event. The International Mining Sector Benchmarking Study Symposium is being hosted jointly by the Department of Planning, Monitoring and Evaluation and the Australian High Commission to share observations and deliberate on the outcomes of research work we have recently completed on the Policy and Regulatory Systems Governing the Mining Sector.
This symposium aims to share lessons derived from the benchmarking report and the Australian Mining Industry Benchmarking Study tour of the 24th to the 28th of August 2015 undertaken to the coal mining district of Central Queensland by a senior South African government delegation.
As we are all aware mining in South Africa remains a key sector and contributor towards economic growth. The sector’s total contribution to GDP is estimated at 7% but has a significant multiplier effect. The industry employs 494 000 people directly, but jobs created in associated industries and through the induced effects of mining added another 880 000 jobs. The mining sector is also responsible for over 50% of exports and almost 20% of private sector gross fixed capital formation. Consequently, the growth of the sector can unlock a much broader development process whilst its decline will be nothing short of catastrophic.
Notwithstanding over one hundred years of mining, the quality of existing reserves is estimated to be more than R35 Trillion, exclusive of energy commodities (coal and uranium) as well as the residual exploration potential for discovery of additional mineral resources using current exploration technology and techniques.
As government we are in the process of implementing a number of interventions to stem the decline in mining and support higher growth and investment in the sector.
We must also acknowledge that a mining impacts on a number of sectors of the economy which requires that various regulatory requirements will be imposed on a single mining project. Being enriched with mineral commodities represents potential wealth, the value in mineral resource endowment emanates from good institutions and good governance.
In actual fact adequate mineral resource management and funding has enabled economies reliant on mineral commodities to diversify to other economic activities. It doesn’t end there as continuous investment in human capital is required to sustain and capitalise on the various opportunities offered by a diversified national economy.
It is government role to ensure that proper regulatory mechanisms are in place to enable mineral extraction to contribute to broader national development objectives while also ensuring that a conducive environment to entice investment is created and maintained. It is therefore safe to note that government is presented with the opportunity of unearthing the correct balance between public and private sector interests.
The primary purpose and objectives of today’s symposium is to share and reflect on the outcomes of the benchmarking study report with the mining industry stakeholders. We look forward to fruitful discussions on lessons and recommendations from the benchmarking study and our experience gained during the study tour to Australia.
Most of all we aim to promote active participation and support of key stakeholders in steering the mining industry towards a sustainable development trajectory.
A brief reflection on the Rapid Appraisal of the Policy and Regulatory Systems Governing the Mining Sector in Australia, Chile, South Africa and Zambia suggest a number of interesting comparisons.
South Africa for instance on mineworker housing illustrate that the historical dependency of the mining sector on migrant labour continues to hamper housing provision in the sector.
The situation of mine workers living in informal settlements close to the mines has parallels in Zambia. Informal settlements are not an issue in Australia. Depending on where a mine is located and the age and type of operation, workers may live in a regular or purpose built town close to the mine , or fly-in fly-out (FIFO) from a major population centre. Many of Chile’s most important mining operations are located close to urban areas, with workers returning to those cities at the end of each day rather than staying at camps on site.
Generally, mining companies provide a range of accommodation types and incentives for their workers to live close to the mine sites in each of the countries studied.
In Australia, Chile and, to a lesser extent in Zambia and South Africa, mining companies have historically invested in nearby towns in an effort to make them more attractive to workers and their families and mitigate the impact of mining operations on local services. However, in the case of Australia, there is a long term trend towards relying less on town-based accommodation and more on FIFO and camp-based accommodation.
In relation to mineworker commuting from home to the place of work the benchmarking study found that under the fly in-fly out (FIFO) model, workers, but not their families, are provided with food and accommodation in camps at or near the mine site. Partly due to the remoteness of many mining activities in Australia, the precarious nature of resource demand, and the high capital cost of constructing towns and residential housing, there has been a greater tendency to rely on FIFO workers.
With regard to the rotational shift system this is associated with a range of problematic impacts for workers and their families, regardless of the specific model used. These are mitigated when workers can return home each day during their shifts. In Australia, highly compressed roster arrangements have been linked to lower levels of employee satisfaction. Shorter shifts have been introduced by some companies to enable women in particular to balance family responsibilities with work. In both Australia and Chile, most workers work a rotational shift. In South Africa, shift rosters are generally different in hard rock (underground) and open pit mines, and in Zambia rosters vary between the ‘old’ and ‘new’ Copperbelts.
When it comes to mine health and safety the benchmarking report observed that Australia’s mining sector has the strongest health and safety record. In Chile, the mining sector is widely considered to have the highest safety standards among all industry sectors. The introduction of new mining health and safety regulation has transformed the South African occupational health and safety environment, resulting in a significant reduction in fatalities. However, high numbers of contractors on mine sites are poorly equipped for occupational health and safety and illegal mining activity pose significant challenges.
There is very little uniformity across Zambian mining companies in the application of health and safety management systems and in risk management practice. Capacity constraints within the Zambian Mines Safety Department inhibits monitoring and enforcement of regulation.
Occupational Health and Safety committees with workforce representation at each mine site play any important role in health and safety in Australia and Chile.
Long latency occupational diseases are a challenge in all of the countries. In Australia, the workers’ compensation legislation appears inadequate to deal justly with the phenomena of latent and degenerative diseases. It is estimated that 5.4% of Chile’s workforce has “high probability” of exposure to silica, and a number of cases have been dealt with by the courts. In South Africa, when migrant mineworkers return home sick with silicosis and TB, it is usually women and children who take care of them – at considerable personal and financial expense.
In South Africa we should mention that government is working with mining industry stakeholders has established a number of one stop service centres in Eastern Cape in Mthatha, in Gauteng in Carletonville, in the Northern Cape in Kuruman and in Limpopo in Burgersfort to provide Health Services, Health Promotion, Social Services and Financial Services.
Silicosis remains an occupational health issue for Zambian miners, although companies report that the most significant problem appears to be the marked increase in cases of TB.
In relation to remuneration and workplace culture the report found that in all four countries, remuneration levels in the mining sector are significantly higher than those of workers in other sectors. When adjusted for purchasing power parity (PPP), the average mining salary is roughly equivalent in Chile and South Africa, higher in Australia and lower in Zambia.
Women represent a low percentage of the mining workforce in all four countries. Numerous companies in Australia and Chile are also supporting broader initiatives to encourage gender inclusion into the mining workforce and move away from the male-dominated nature of the industry. Nevertheless, these efforts have yet not been successful in substantially increasing gender parity in the mining sector, either in terms of remuneration or employment numbers. Women still face a range of challenges associated with the masculine culture of mining, including personal safety challenges in the workplace.
The report found mining companies support a suite of local content and skills development initiatives to varying degrees of success. Companies have rolled out strategic and socially inclusive social investment programmes and community initiatives to invest in communities in which they operate. In the cases of Western Australia and Queensland (until recently) a proportion of the royalties generated by the mining sector is directed toward the regions in which mining operations are located. This is not the case in Chile, South Africa and Zambia.
I recently led a senior South African government delegation to Australia as part of our Benchmarking Study tour from the 24th to the 28th of August 2015 undertaken to the coal mining district of Central Queensland with assistance of the Australian High Commission and the University of Queensland. During the study tour we observed general similarities between South Africa and Australia including supporting the views reflected in the study report.
There is much we can learn from our visit to Australia and this should be reflected in our discussion and learnings today.
We are looking forward to a productive and constructive engagement at the symposium.
Once again thank you for your attendance at this important event.
