The President and the Chief Executive of the Chamber of Mines, members of the executive council, ladies and gentlemen, thank you for your kind invitation to address you during your historic annual general meeting, which marks a 120 year long journey of existence of the Chamber of Mines. This journey is almost as long as the history of organised mining in South Africa.
The Chamber of Mines was founded in 1889 with the aim of distributing statistical information and validating prospectuses. This was during the height of colonial plunder of mineral resources of Africa. The rural lifestyle of the indigenous populations was disrupted to create pools of cheap labour that in South Africa became a pillar of the apartheid state. I am raising this painful history because the Chamber has evolved to become the principal advocate of policy positions endorsed by mining employers and seeks to represent these to the government and other relevant policy-making and opinion forming entities, both locally and internationally.
Our 16 years of democracy represents a fraction of the Chamber's existence and we are faced with a plethora of challenges, ranging from addressing the gross inequalities created by exclusionary policies of the apartheid regime to the ramifications of the global financial crisis. The advent of democracy necessitated decisive policy interventions that sought to systematically reverse the injustices that have been endured by the majority of South Africans over centuries.
At its inception, the Chamber was created within a specific context, which defined its content and structure to pursue its mandate. The dictates of constant change have actuated global dynamism, which is inconsistent with the current structure and content of the chamber of mines. This marks a significant point of departure between the supposedly main stakeholders in the mining industry, as corroborated by the many unhealthy tensions between my department and the Chamber in particular. The political changes in South Africa aggravated the pace and form of this notion of constant change, to which the current Chamber is glaringly oblivious. I also wish to hasten to mention that these tensions create a fertile ground for dissidents to occupy our space for collaboration.
Five years ago we met as the mining industry, labour unions and government to negotiate and agree on a Mining Charter, a blueprint of bringing about transformation of the sector from its painful past. The Charter covered a number of matters to drive transformation including Social and Labour Plans, skills development, employment equity, local economic development, preferential procurement, health and safety, and beneficiation.
We have completed the review of the Mining Charter and we are refining the findings and recommendations that we will release in due course. Our initial observations, however, are that we have not lived up to the spirit and intent of the Charter. Some of the members of the Chamber refused to cooperate with the company appointed to conduct the review.
One of the clauses of the Mining Charter relates to social and labour plans to transform the industry. These plans come out of recognition that profitable mining activity has been taking place in many areas of the country for over a century but surrounding communities still live in abject poverty.
The Charter compels companies, as a condition for being granted a mining license, to contribute to the sustainable socio-economic development of mining communities and labour-sending areas. The Charter recognises that it is imperative that the act of contributing to these communities should be guided by the needs and priorities of the communities involved through social and labour plans. However, companies submit financial estimates of their social and labour plans that are not compatible with the submitted plans leading to non-implementation of plans.
Recently, due to the economic crunch, a lot of companies have indicated that they may have difficulties in implementing the Social and labour Plans. This means the transformation in the form of reducing illiteracy, poverty and unemployment in communities will take a backseat.
Another way of economically investing in communities is through preferential procurement. Companies were supposed to commit to a three-to-five year progression plan of procuring from Historically Disadvantaged South Africans in terms of capital goods, services and consumables. Ideally mining communities should be given opportunities to participate in providing these services, and if they are not available, attempts should be made to build capacity of those communities. However, most of the time, companies procure from outside the local municipality and little is done to capacitate locals so that in the near future they could also participate and improve their quality of life. This element of Social and Labour Plans could assist in building small, medium and micro enterprises.
The Charter sets the following targets with regard to employment equity in the mines: 10% women in mining and 40% of Historically Disadvantaged South Africans (HDSA) in management by April 2009. The intention is to ensure that women are given opportunities to participate in the core business of mining. The participation of Historically Disadvantaged South Africans in management is aimed at ensuring that HDSA take part in decision-making.
Although companies had committed to the set targets, most of the companies have not met the targets citing various challenges including a supposed lack of skilled Historically Disadvantaged South Africans to fill vacancies. In instances where targets seem to be met, especially on HDSA in management, the race and gender is not reported and upon further investigation one might discover that the numbers may be high due to white women filling those posts.
Skills development is another sore issue.
The paucity of skills in the industry bears testimony to the lack of investment in critical skills development. As a result, Historically Disadvantaged South Africans continue to be under-represented in most core occupational categories and levels of employment in the mining industry. While the original intent of the Charter was to use and expand the existing skills base to contribute to sustainable development of the mining industry, it appears that the implementation of this element has focussed on basic skills development at the expense of developing the requisite skills to effect meaningful transformation of the industry.
Developing skills is also necessary if we are to add value to the minerals we have in the country. We enjoyed a smaller share of the recent commodity boom largely because most of our mineral commodities are exported un-beneficiated. We are currently finalising a beneficiation strategy to enhance the value of exports, localise imports and create sustainable jobs. The strategy encourages strategic investment in assets to maximise long-term growth. This is necessary to facilitate economic diversification, expedite progress towards a knowledge-based economy, achieve incremental GDP growth in mineral value addition and create opportunities for enterprise development and skills development.
As I indicated earlier, ladies and gentlemen, my department will soon release the report on the review of the first five years of the Mining Charter. This will guide us in together charting a way for the next five years and quicken the pace of transformation of the mining industry.
One of the ways of breaking with our painful colonial and apartheid past is through matters of health and safety. Our safety and ill health track record in the mines is still a subject of grave concern for my department. The industry's stakeholders have over the last year managed to record a year on year improvement in fatalities due to mine accidents. So far in 2009, we have lost 143 miners to mining accidents with the falls of ground accidents still being the largest accident category and predominant cause of fatalities in our mines.
Of the fatalities reported so far this year, 55 were as a result of the falls of ground accidents and 70% of these falls of ground accidents were due to gravity induce incidents. What is frustrating is the fact that all these accidents are "repeat" in nature and by now we should have learned from previous cases. Both the Council for Geoscience and the Mine Health and Safety Council are currently working on a project to improve seismic network coverage and seismic data integration and transparency. However, more work needs to done to reduce gravity-induced accidents because we have the means and resources already.
Occupational health impacts are difficult to quantify since many health effects are not immediate. Occupational lung diseases are a major cause of premature retirement and death at SA mines. Dust-related lung diseases such as silicosis overshadow mine accidents in numbers of workers affected. Noise is one of the significant health hazards for workers in SA mining industry. More emphasis and investment on matters of health is urgently needed to change the status quo at our mines. In the same token, TB, HIV and AIDS cannot be allowed to kill more mine workers especially in times where measures are in place fight these diseases. We have to redouble our efforts to improve the health of mineworkers.
Our pride in the mining industry and its contribution to the country's economic development dictates that we must protect it with our lives. To this extent, urgent change in the content and structure of the chamber is needed to remain relevant. The nature and character of this change must be informed by the prevailing context of socio-economic and political transformation. The change must be tangible, have substance and content, but most certainly it should not be artificial.
In conclusion, ladies and gentlemen, we have pockets of excellence in cooperation as stakeholders. In the past, we created collaborative structures responsive to specific challenges, which have worked exceptionally well. I recall the time of the gold crisis as well as mining charter crisis when such structures delivered results successfully, but were disbanded as soon as desired results were achieved. The recent example of this collaboration is aptly captured in our collaborative work of MIGDETT, the Mining, Growth, Development and Employment Task Team, which is constituted by us as government, business and organised labour.
As you know, MIGDETT constitutes our collaborative response to the vagaries of the financial crisis and has borne good results with job losses contained to a figure much less than originally forecasted. It is a long held view of my department that we need to work closer with our stakeholders and to create a thriving climate for the mining industry.
It is heartening that companies are giving South Africa the thumbs up as an investment destination. I applaud Lonmin's decision to list on the Johannesburg Securities Exchange and relocate its operational headquarters from London to Johannesburg. This indicates confidence in the economy of South Africa as well as the development of the mining sector.
I am convinced that as you deliberate during your AGM, you will be redefining your content and structure and ensuring that it becomes relevant to today's context. There is room of coexistence among us as stakeholders, brought together by a common dynamic. I look forward to meeting the reformed Chamber, post this AGM.
I call upon you as a collective to stand up and be counted as agencies of sustainable transformation and growth.
I thank you.
Issued by: Department of Mineral Resources
2 November 2009
