Speech by the Honourable Minister of Mineral Resources, Adv. Ngoako Ramatlhodi (MP), at the Small-Scale Mining Conference, Mittah Seperepere Convention Centre, Kimberley
Program director
Honourable Premier of the Northern Cape and co-host, Ms. Sylvia Lucas Honourable MEC of Economic Development and Tourism, Mr John Block
State Owned Entities and organised business, represented
Distinguished guests
Ladies and gentlemen
Allow me to acknowledge the confirmed participation of Minister of the department of Small Business Development, Mme Lindiwe Zulu who will join us during the Friday segment. Her department with the support institutions are however present today.
It gives me great pleasure to participate in the Northern Cape Small Scale Mining Conference, which I promised to convene during the Izimbizo held in the province earlier in the year. The theme of the conference captures the essence of our intent with some eloquence, namely “Optimising Small Scale Mining for economic growth and development”.
Our government, and the fifth democratic administration in particular, has anchored the notion of inclusive growth and development on small business development. As a result, President Zuma established a dedicated Ministry of Small Business Development, headed by Minister Lindiwe Zulu, who will be joining the conference tomorrow.
Small-scale mining is a permanent feature of the economic landscape of most mineral rich countries in the world, including South Africa. One just has to look carefully in the rural areas to spot the level of small-scale mining activities in terms of diamond mining, quarrying, clay and sand mining, to name a few examples.
In fact, the South African mining industry as we know it has its origins in small-scale mining activities. Firstly, it was here in Kimberley where some 800 claims were established within a month after the discovery of diamonds in 1871, and subsequent small diamond workings in the diamond fields of the Northern Cape. This was followed by the discovery of gold on the farm Langlaagte near Johannesburg in 1886 where the first mining operations were also in the form of numerous small-scale gold mining claims on the outcrop of the gold bearing reefs stretching from the East Rand to the West Rand. These claims were later consolidated into bigger gold mining entities.
Opportunities for small scale mining in South Africa fall into two broad categories: the mining and quarrying of industrial minerals and construction materials on a small scale, and the mining of relatively high-value minerals including, diamonds, and semi-precious minerals such as tiger’s eye. The former is mostly for local market consumption and the latter is generally for international markets.
While a fair amount of both categories of small-scale mining do occur in metropolitan areas and their outskirts, most small-scale mining activities in South Africa are generally located in rural and remote areas where it is difficult to attract investment, due to lack of access to infrastructure.
Ladies and gentlemen, there are compelling socio-economic reasons for the DMR to support and encourage the development of a competitive small- scale mining sector in the economy. In particular, competitive small-scale mining operations can, because of their low overhead costs, successfully and profitably exploit small deposits and other minerals that are neither attractive nor economically viable for large-scale mining operations.
Moreover, the relatively lower capital and less complex technological requirements for small-scale mining make it an easier point of entry into the mining sector, especially for HDSA entrepreneurs who, because they are often considered high-risk by commercial financial institutions, experience difficulties when trying to secure finance to underwrite their business and entrepreneurial activities.
Most significantly, as mentioned earlier, small-scale mining operations can offer much needed employment opportunities for low-skilled labour in remote rural areas. Employment opportunities are a single source of sustainable rural livelihoods for a majority of low-skilled labour that often live under abject poverty in remote rural areas.
At the turn of the current millennium, the then Department of Minerals and Energy supported the launch of the Small-Scale Mining Chamber here in Kimberley. It was envisaged at the time that this Chamber would independently facilitate the support of small-scale mining activities in the province to ensure sustainable growth of the sector.
The government has entrenched the support of SMME development in the Mineral and Petroleum Resources Development Act. Government therefore actively encourages the sustainable development of small-scale mining in order to ensure the optimal exploitation of small mineral deposits and to enable this sector to make a positive contribution to the national, provincial and local economies.
The Mining Charter has also been developed to support enterprise development and procurement of goods and services from HDSAs, while community development programmes must also contribute towards inclusive growth and participation of affected communities.
Government believes that increased support for Small, Medium and Micro Enterprises (SMMEs) in mining has merit, and needs to be reconsidered under a new policy framework which will deal adequately with the multiplicity and complexity of the challenges facing the sector.
In this regard, we will be implementing a new framework support mechanism for small scale mining in this financial year to address the many challenges and constrains which are faced by the sector. These include lack of access to financial assistance, which is but one of the many difficulties encountered by small-scale mining operators. Furthermore, access to finance is compounded by the lack of knowledge of other available financing mechanisms throughout government.
Further constrains faced by the sector include:
- Lack of knowledge about available training programmes, which should help match specific needs of the sector;
- Outdated mining methods and processing techniques;
- Lack of knowledge of mine health and safety standards as well as environmental standards; and
- Access to markets.
- Lastly, the ideas and insights that we currently have of the small-scale mining sector suggest that, for us to develop it into a dynamic and sustainable small scale mining sector, we should:
- Encourage the use of best practice for mining and processing of minerals, for environmental protection and management and for occupational health and safety, through a well-coordinated formulation of sector- specific training programmes and dissemination of information pertaining to the sector;
- Promote the adoption of a strategic partnership approach to finding sustainable solutions to the challenges facing the small scale mining sector, as government alone cannot satisfactorily address these challenges. For instance, small-scale mining should have insights into government programmes targeting specific geographical areas, such as the Integrated Sustainable Rural Development Programme (ISRDP) and Urban Renewal Strategy; and Local Economic Development initiatives of Municipalities.
We should also support the development of technical experience and capacity building among small-scale miners as well as the introduction of fair labour practices in their operations. Furthermore, there is a need to inculcate the spirit of entrepreneurship, which promotes personal involvement and commitment of small-scale miners to their mining ventures and promote adherence to mining regulations.
Ladies and gentlemen,
I am encouraged by the positive response of the emerging business community of the Northern Cape for having heeded my call during the Imbizo that they should organise themselves. I am informed that a Mining and Energy Forum has been established institutionally and is already mobilising for membership, not only in the Province, but nationally. I must congratulate this business community on a swift move and look forward to more responses to our collaborative initiatives that seek to improve the lives of our people.
Let me reiterate that the mining regulatory reforms brought about by the democratic government have ensured that the mineral and petroleum resources become a national heritage of all the peoples of South Africa. In essence, that mineral ownership has been completely separated from land ownership. This, a sacred trust to the people of this freed land, means that minerals belong to all South Africans, under custodianship of the State. The law deliberately introduces instruments that compensate for the disproportionate inconvenience created by communities’ proximal location to mining operations, such as the Social and Labour Plans.
The government shall not tolerate deliberate evasion or misinterpretation of the law, which is sharply increasing in the province. This includes interpretation of local content for procurement to mean local to communities in which mining is taking place. It must be very clear that South Africa’s mines must be globally competitive with sterling health and safety records. This cannot be compromised by any means and emphasis should be placed on building the necessary capacity for local entrepreneurs to become enablers of an inclusive and sustainable mining industry, not the corollary.
In closing, may I stress that it is my intention to set the tone for a revival of the small-scale mining industry. I have invited competent structures of government to unlock the challenges faced by the active and emergent small-scale miners in the province. Your participation, contributions and perspectives in the breakaway sessions will be very important, and viewed by us in government as such, to help grow a sustainable small scale mining sector in South Africa. This will form part of the backbone of a strong, democratic South Africa.
I look forward to receiving reports of the various commissions tomorrow, which have been grouped in three critical thematic areas of regulatory support, technical support mechanisms and access to funding.
The conference will culminate in the adoption of an accord. This accord will demonstrate our commitment to ensuring that, beyond the two-day conference, we continue to strengthen our existing regulatory and other available channels of support for the development of the small-scale mining industry in South Africa.
I thank you.
