Honourable Chairperson,
Minister Shabangu,
Honourable Members,
Leaders of the trade Union Movement
Leaders of the business community
Comrades and friends,
Allow me to join the nation in paying tribute to the mother of our nation, Mama Albertina Nontsikelelo Sisulu who has gone to join other esteemed leaders of our revolution. We shall be eternally grateful and indebted to her warm motherly embrace and guidance that has shaped and touched all of us. May her undying spirit live long.
Last week I had the honour to deliver my maiden budget vote speech as the Deputy Minister of Mineral Resources.
Today as I stand in front of the National Council of Provinces (NCOP), I am humbled that I have the privilege to do the same to this august house charged with the responsibility of oversight for our provinces.
As experts would say, the real delivery by any government department happens at the local or provincial level. In the case of Department of Minerals Resources (DMR), the delivery or lack thereof is done at the provincial level. Mining assets do not exist in a vacuum. Therefore the conduct of mining activities have direct implication to communities in these provinces – be it Mogalakwena community in Limpopo, the BaKgatlha BaKgafela baTlhaping baga Maidi, baTlhaping baga Phuduhutswana in the North West, the Mkhwanazi community in KwaZulu-Natal, the Prieska, Schmitsdrift, or Namaqualand communities in the Northern Cape to mention but a few. These are some of the communities that we have to answer to as a department specifically and to the nation in general as the regulator of this sector.
It has been a mere seven months since I was deployed by the President and our movement, the ANC, to this critically important portfolio in Mineral Resources. I would therefore like to express my gratitude to these two great institutions for having confidence in my ability to discharge these responsibilities.
Let me also take this opportunity to thank the Minister Susan Shabangu for her leadership and guidance. The director general of the department, Advocate Sandile Nogxina has served the department with distinction and has proved a solid anchor when storms tried to assail this ship. As we bid him farewell at the end of the month, we would like to express our sincere gratitude. Thank you Tshawe, Mde nge ntonga.
It would be amiss for me not to welcome two comrades, Duma Nkosi and Mandla Rasmeni, to the offices of the Director-General and deputy minister respectively. These two servants of the people were right here in Parliament during the period of the drafting of the MPRDA and will continue to serve as a nexus between the legislature, the executive and the department.
This month, June is pivotal in the history of our young democracy. The sacrifice of the young men and women should make us reflect on how far we have gone in implementing the vision of the Freedom Charter.
Honourable chair! At this point I would like to recognise in this house one of those young people who was at the forefront of 16 June revolution that changed the course of history forever, Honourable member Dan Montsisi.
The sacrifice of these young people is perhaps best captured in Nicolai Ostrovski’s How the Steel Was Tempered and I quote:
‘Man's dearest possession is life. It is given to him but once, and he must live it so as to feel no torturing regrets for wasted years, never know the burning shame of a mean and petty past; so live that, dying, he might say: all my life, all my strength were given to the finest cause in all the world - the fight for the liberation of mankind.’
The mining industry has a duty to ensure that we do not fail young people. We must ensure that the 1.5 million of our children starting grade one this year finish grade twelve without disappearing from the system. We know that a sizable number of those who walk the streets looking for work are youth between ages 16 to 35. History will judge us harshly if we do not do our utmost to honour the youth by providing them with opportunities for decent work.
In the recent history of this young nation, this month will also go down as a true test of the spirit and fortitude of South Africa. Not only did we host the best soccer World Cup a mere 12 months ago, we also confounded Afro-pessimists who wished the worst on us but we came through with flying colours.
Let the same unity of spirit of the Freedom Charter in 1955, 16 June 1976 and June 2010 World Cup continue to inspire us as we tackle the challenges that confronts us as a society today.
In a few weeks, we will also be celebrating the 93rd birthday of our international icon, President Nelson Mandela who very much like President Oliver Tambo is the unifier of the nation and the organiser of victory.
President Mandela, himself a former mineworker was in fact elected in 1989 as the honorary life-president of the National Union of Mineworkers (NUM), and I believe there is no better tribute we can pay to him than to get the mine workers and mine owners to work together to improve the living conditions of people in the industry. We salute you Madiba, Sthwalandwe Seaparankoe.
To this end, Parliament resolved in 2007 that:
- the living and working conditions of mineworkers be investigated and improved
- to support the initiatives by the NUM to build a workers museum
- That this democratic Parliament should consider naming some of its buildings after JB Marks, the leader of the African Mineworkers Union.
Honourable chair! We are called upon to see to the implementation of this resolution.
The Minister has already outlined the budget that has been allocated to the department, after all budgets are a mere expression of policy in numbers. The Minister’s budget statement represents a programme of the ANC-led government to use the vast mineral resources of our country to contribute to the overall objective of lifting our people out of the grinding poverty and underdevelopment that still afflicts our society.
It is now accepted wisdom that one of the best ways to extricate people out of the morass of poverty is through education. To this end, I am happy to report that the Mining Qualifications Authority is forging ahead with creating a skilled workforce. MQA’s mandate is to ensure that the mining and minerals sector has sufficient competent people who will improve health and safety, employment equity and increase the productive capacity of our mining industry.
There is no province where Mining Qualification Authority (MQA) does not have a footprint with programmes which include learnerships, artisans, skills programme and adult education. All projects are focussed on rural reach with a special emphasis on women and people with disabilities.
One of these projects included giving training to 200 learners including women in all the provinces on small scale mining. MQA also placed 627 learners with 20 mining companies to gain work experience.
Going forward, MQA plans to develop training to support the gemstone processing and jewellery manufacturing which dovetails with the beneficiation strategy that the minister has spoken about. The authority will continue with the programmes which amongst others include developing management capacity within designated groups, workplace coaches/instructors as well as the HIV and AIDS (including TB) prevention programme.
This is in line with an identified need for collaboration with the South African National AIDS Council (SANAC). We should use this window of opportunity to tackle the scourge of HIV and AIDS in the mining industry and complement the Mining industry where it has pioneered centres of excellence in fighting this scourge.
Let us therefore work together to ensure that this is sustainable beyond the confines of the mining environment so that those infected and affected continue to receive treatment perhaps in concert with the public health system once the worker leaves the mining industry.
Revitalisation of the Diamond Industry for growth and job creation
As instructed by President Zuma, in his state of the nation address, it is our belief that we can use the possibilities offered by the diamond industry to meet the twin imperatives of job creation and economic growth. Areas that are known to have diamond deposits include North West, Free State, Northern and Western Cape.
These areas have contributed to making South Africa a major diamond producer ranking sixth in the world in terms of volume (carats) and fourth in terms of value.
It is however, worrying that we remain a small player in the downstream sector of the diamond value chain, with a disproportionately small and underdeveloped beneficiation industry. The development of the beneficiation industry holds an immense potential to stimulate further economic activities and to create thousands of new jobs.
It is precisely for this reason that we have, through consultations with the diamond producers, Diamond Task Team of the Chamber of Mines, State Diamond Trader, South African Diamond and Precious Metals Regulator, United Diamond Association of South Africa and others, sought to gain a better understanding of the factors that have constrained the sustainable development of our country’s diamond beneficiation industry.
The findings of our consultative engagements have revealed that there are four broad categories of challenges that need to be addressed systematically in order to reposition and revitalise our downstream diamond beneficiation industry for sustainable growth and development. Briefly these challenges are:
Lack of access to finance
Diamond beneficiation is a capital intensive industry that requires funding, particularly for small players. This is so because of the costly nature of the industry’s raw materials, equipment and the time-honoured persistence by the main rough diamond producers for their clients to pay cash on (or even before) delivery. As a result, no substantial trading and cutting business can flourish without a supportive banking environment. Lack of capital prohibits business growth and access to modern technology.
In South Africa only two commercial banks (Nedbank and ABN Amro) are currently providing funding for the sector and mainly focus on the Diamond Trading Company (DTC) preferred clients (sight holders) which are normally large established companies. The local small and medium-sized manufacturers have no or very limited access to sources of finance. The IDC has provided funding to some companies in the sector. However, the majority of beneficiating entities do not have access to funding.
We are currently studying different Diamond Funding models (Antwerp Diamond Bank, Israel Banks and State Bank of India) in order to propose to local financial institutions and, especially the IDC, to consider developing a South African Diamond Funding model to support our local beneficiation industry.
Skills shortage
Shortage of advanced cutting and polishing as well as jewellery manufacturing skills remains a major barrier to the development of a competitive diamond beneficiation industry. Those who possess the skills in this highly specialised field have an obligation to impart this skill to a younger generation. This means that training is critical in developing younger talent.
To this end, we are working with the Further Education and Training (FET) sector, through the Ministry of Higher Education and Training, Mining Qualification Authority (MQA) and other industry stakeholders to develop a curriculum that will respond meaningfully to the skills needs of the diamond beneficiation industry.
Most of our bilateral agreements with different countries around the world include a component on skills/technology transfer. We are also exploring this avenue in our quest to develop skills to underwrite the development of a sustainable and globally competitive diamond beneficiation industry. In fact, one of the countries that have become the world centre of cutting and polishing diamonds has already committed to sending its skilled and trained polishers and cutters to the country to assist in terms developing our skills locally.
Lack of access to markets
Currently there are five major polished diamond wholesalers in the country. Since most of the beneficiators in this country do not have access to overseas markets, they have to sell their polished diamonds to these wholesalers.
The wholesalers, however, are alleged to have the propensity to drive down the prices of polished diamonds thereby squeezing the margins of the diamond beneficiators. This has a negative impact on the profit margins of beneficiators, thus rendering their business unsustainable.
The African Growth and Opportunity Act (AGOA) provide access to markets in the US, which consumes more than 50 percent of all diamond jewellery in the world. This is an opportunity for local diamond beneficiators to grow their markets internationally. In addition, a free trade area exists with the European Union (EU), which provides for duty free access into the EU.
Together with local diamond beneficiators, we will be exploring means to leverage on these instruments in order facilitate access of local beneficiators’ goods into these lucrative markets.
Lack of security of supply
With the exception of sight holders, most beneficiators do not have access to a constant supply of rough diamonds of a consistent quality. This challenge has a significant impact on diamond beneficiation as it precludes long term planning and leads to other secondary challenges, such as difficulty in accessing finance. Limited access to rough diamonds is often cited as one of the main reasons why the local downstream beneficiation industry has not really taken off.
We are working with the State Diamond Trader and producers to ensure that there is constant supply of rough diamonds. In particular, we are engaging Alexkor and other producers in which the State has a stake with a view to developing a long-term solution to the challenge of the supply of rough diamonds for the downstream beneficiation industry.
We are also exploring the possibilities of importing diamonds from other African diamond producing countries. In particular, through our membership of the African Diamond Producing Countries (ADPA), we are looking at importing diamonds from, among others, Angola, Democratic Republic of Congo and Zimbabwe.
Creating a sustainable and globally competitive diamond beneficiation industry capable of creating meaningful employment opportunities requires us to work closely with other government departments and state institutions. In this regard, I am happy to report that we are currently engaging the national treasury regarding the implementation of our call for the repatriation of proceeds generated by exports of unpolished diamonds (section 69A of the Diamonds Amendment Act of 2005). We believe that some of the financial regulations have had the unintended consequence of not helping with the competitiveness of the diamond beneficiation industry and consequently this practise must be reviewed.
We need to review the business model of the Trader to allow it to continue implementing its core mandate of promoting equitable access to and local beneficiation of the country’s diamonds. An institution established to carry out the developmental agenda of government function effectively if its business model is entirely driven by free market principles.
Honourable chairperson,
Mine health and safety
The safety track record in the South African mining industry continues to be a matter of great concern to the department although the mining industry has in the last year managed to record a year-on-year reduction in fatalities due to mine accidents.
This year alone, 53 fatalities have been recorded against 49 for the same period last year. As things stand, it looks like the improvement which saw 127 fatalities in 2010 against 168 the previous year will be negated. This is unacceptable and we continue to engage the mining industry to do its utmost to ensure that no miner loses a life.
These incidents are avoidable. Fall of Ground accidents still remain the largest accident category and the predominant cause of fatalities followed by transportation and machinery categories respectively.
Occupational health impacts are not immediate and hence difficult to quantify. Silicosis remains a major cause of premature retirement and death at South African mines due to excessive dust exposure. On the other hand, tuberculosis (TB) continues to be a serious challenge for the mining industry and this is exacerbated by HIV and AIDS. Noise Induced Hearing Loss (NIHL) is also a significant health hazard due to exposures to high levels of noise in working places.
An underground fire was detected at Harmony’s, Phakisa Mine in the Free State and two proto teams were sent down to investigate. An explosion took place whereby three members of the proto teams were fatally injured and another two members subsequently died from their injuries. During May 2010 a FOG accident killed three mineworkers at Simmer & Jack, 5# Shaft in the Stilfontein vicinity. Another massive FOG was responsible for the demise of five mineworkers at Aquarius, Marikana Mine close to Rustenburg.
There were two regions that succeeded to have a fatal free year, namely Western Cape and Eastern Cape. Two other regions managed to maintain the same number of fatalities Northern Cape and Free State. The Free State had an increase in fatality rates(17.39%) while Northern Cape had a reduction in the fatality rates (1.29%) and this is related to the decrease in the labour at work in the Free State region while the Northern Cape has had an increase in the labour at work.
While there has been an overall improvement of about 8%, this trend is negated in Limpopo which has shown a marked increase in injuries. This is partly a function of changed borders and off course an increase in mining activity in the province.
Acid Mine Drainage (AMD)
This week also marks Environment Week and the department like ours is alive to the possible harm mining can inflict or has inflicted on our natural habitat. It is for this reason that the department has embarked on a number of remedial actions to try and mitigate the damage to the environment because it is our belief that mining and the environment can co-exist.
One of those environmental challenges is what has come to be known as acid mine drainage which is a serious threat. But what exactly is AMD?
Acid rock drainage forms due to reactions between sulphide minerals, oxygen and water, catalysed by bacteria. The mining of sulphide-rich materials exposes sulphide minerals to the elements, accelerating the natural process, forming acid mine drainage. The sulphuric acid generated in these reactions can mobilise other components of materials, often resulting in high concentrations of toxic heavy metals in the rivers and streams which drain mining areas.
The DMR, working together with other government departments and state- owned entities will continue to deal with the urgent challenge of Acid Mine Drainage. Key areas where acid mine drainage related problems have been identified in our country include the Witwatersrand Gold Fields (gold mining areas of Gauteng and Free State), various coal fields with serious impact reported in Mpumalanga and the O’Kiep Copper District in the Northern Cape. Other areas where sulphide-rich materials are mined still need further investigation.
Government has commenced with the construction of a number of canals including Grootvlei and the Klipspruit area between Florida Lake and Fleurhof Dam which is currently under construction.
We are in this respect currently implementing the report that was drafted by a team of experts led by the Council for Geoscience. Working together through an inter-governmental team we are implementing the recommendations which among others include the pumping and the treatment of water in the three prioritised basins (Western, Central and Eastern basins).
In closing, I would like to quote Franz Kafka who honoured the youth by saying: Youth is happy because it has capacity to see beauty. Anyone who keeps the ability to see beauty never grows old.
Finally, I want to thank the staff in the ministry and the department as well as my family for continued support. Working together, indeed, we can do more.
I thank you.
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