Address delivered by the Gauteng MEC for Economic Development, Mr Nkosiphendule Kolisile to the Chamber of Mines Gold Producers' Committee, Johannesburg Country Club

Chairperson of the Gold Producers’ Committee, Mr Mike Ohair
Members of the Gold Producers’ Committee present here today
Ladies and Gentlemen

Thank you for this opportunity to address the Gold Producers’ Committee. This gathering takes place at a time when the mining industry is experiencing one of its most testing moments in the democratic period. The tragic events at Lonmin’s Marikana mine have firmly placed the mining industry in South Africa on the spotlight.

The lessons from this tragedy must not escape us. I am certain that most of you will agree that one of the most important lessons we can draw from this tragedy is that the persisting economic inequality and poverty in our country can only be sustained at a great cost to stability of the entire South African society.

The province of Gauteng has not been left unscathed by the turbulence in the mining sector in South Africa. Developments at Kloof and Driefontein mines in the West Rand as well as Modder East in Ekurhuleni are some of the areas experiencing this tumult.

The groundswell of discontent that is evident in our society, especially among the poor, points to a growing impatience with the triple challenges of poverty, inequality and unemployment.

I am certain that you will concur with me that the consequences of poverty, inequality and unemployment pose a significant threat to our welfare as a country and as a province. This is the reason why government and business must to work in concert to ensure that the fruits of our democracy are enjoyed by all, most importantly the poor people in this country. This is a challenge that we have to confront with the necessary commitment, vigour and tenacity.

Allow me to remind you of the pressing challenges we face as a province. The unemployment rate in Gauteng is currently at 25, 4%. The level of economic growth, which stands at 3%, is also cause for concern. Educational attainment in the province also reveals a startling picture. More than a third of the people in the province have highest educational attainment levels between grades 0 and 9. Inequality, measured through the Gini co-efficient is 0,65, and the Human Development Index is 0,68.[1] These unsettling facts merely highlight the deep-seated inequalities in terms of income and opportunities in our province.

We remind you of this grim reality in order to illustrate to you the enormous task that confronts both government and business.

We also know that you are well aware that this particular region of the country was built on the foundation of gold, which is today mined deeper and deeper into the belly of the earth.  The historical importance of gold in this country is recorded in virtually all the annals of our history - in our museums and libraries.

Indeed, the birth of cities, banking services, infrastructure development and telecommunications in many ways bears the imprints of the gold mining industry and its contribution to the economic landscape of our country as a whole and Gauteng Province in particular.

The mining remains an important element of the South African economy. The industry accounts for about 5.3% of South Africa’s GDP and provides employment to some 500 000 workers directly, and a further 500 000 indirectly. It is further estimated that almost 60% of the country’s export revenue is attributable to mining, mineral and secondary beneficiated products.

It is for this reason that we believe that the success of the Gauteng Provincial Government’s imperative to ensure that the province builds “an inclusive and sustainable Gauteng City-Region that promotes a developmental and equitable society”, requires unremitting support and commitment from the mining sector.

The task falling on our shoulders as social partners is a mammoth one. The New Growth Path (NGP) aims to create 5 million jobs by 2020 and grow the South African economy by 7% annually. This effectively means that Gauteng province has to produce about 1.5 million jobs by 2020 or 150 000 per annum.

We cannot be achieve this in the absence of strong public and private investment as well as a push towards labour-intensive industries and a concerted effort to support local industries.

Allow me to impress upon you some of the mining related initiatives that the Gauteng Department of Economic Development is embarking upon in order to stimulate redistributive economic development, create decent work, build sustainable livelihoods and reduce income inequality in the province.

The Department is fiercely leading the project for the planned Industrial Development Zone (IDZ) programme at OR Tambo International Airport. This programme is aimed at raising the competitiveness of the manufacturing sector through leveraging investment in export-oriented manufacturing industries and through the export of value-added manufacture products.

The Jewellery Manufacturing Precinct (JMP) has been identified as an anchor project of the broader IDZ programme. This is because jewellery manufacturing is a section of the value chain with the greatest potential to increase value addition to precious metals incorporating employment creation, entrepreneurship opportunities and foreign revenue generation.

We envisage that the precinct will be a hub for international and local manufacturers of fine gold, platinum, diamond, precious and semi-precious metal, jewellery for export to the United States, Europe and other accessible foreign countries.

The department is mindful of the fact that the jewellery manufacturing industry in the country is facing serious challenges with both employment, gold production and exports having declined by more than half while imports increased between 2006 and 2010.

This is why we have identified the Chamber of Mines and the Gold Producer’s Committee in particular as key stakeholders to partner with in relation to elements that are value adding items to the Jewellery Manufacturing Precinct. These include Beneficiation, Skills Development as well as information sharing in Jewellery Manufacturing.

The department also hopes to transpose the successful platinum financing scheme for the jewellery sector by Anglo Platinum, and apply this to other minerals mined in our country. In this regard, we are hoping that this meeting today will open the dialogue with other mining houses to consider a gold loan scheme as a contribution to the Jewellery Manufacturing Precinct. The scheme will mainly serve the purpose of providing loans to manufactures as a means to stimulate the industry.

Discussions aimed at finalising this initiative are at an advanced stage and the Department of Trade and Industry as well as the Department of Mineral Resources are intricately involved in this process. I am therefore taking this opportunity to invite the Chamber of Mines and Gold Producers’ Committee to come on board as we embark on this promising initiative.

This scheme presents a golden opportunity to reorient our mining sector from solely focusing on the export of raw materials. The beneficiation resulting from this scheme will certainly go a long way in reducing the staggering levels of unemployment in our province.

Whilst we acknowledge the commitment of the mining sector to training and skills development in South Africa and Gauteng in particular, we must note that the lack of skills in design and manufacturing is a serious hurdle to some of the plans that we have as government. The country currently does not have adequate institutions of higher learning and Further Education and Training colleges that offer training for jewellery manufacturing and design. This presents a challenge to our plans for a Jewellery Manufacturing Precinct. This is a matter that we have to discuss and find solutions to.

We will be launching the Gauteng Jobs Campaign towards the end of this month. This campaign is geared towards mobilising Gauteng based companies to partner with the Gauteng Provincial Government in creating employment within labour absorptive sectors. We hope that the call for companies to open their doors to create jobs and unlock training opportunities for the youth will be well received within the mining sector.

In conclusion, let me state once again that the unflattering light shining on the mining industry at the present moment presents a unparalleled opportunity not only for introspection but for industry, government and labour to forge a durable partnership that can turn the tide against the three biggest challenges confronting us.

As Deputy President Kgalema Mothlante stated last week at the 17th National Economic Development and Labour Council (NEDLAC) Annual Summit, “the tragedy at Marikana should make us all reflect on how we confront poverty and inequality through our respective institutions and organisations. It also challenges us to re-commit ourselves to more effective social dialogue at national and regional levels”. We have a collective responsibility to work together to overcome these challenges. We can only absolve that responsibility at our peril.

With those words, I wish you a successful meeting.