Programme director
Honourable ministers
Distinguished guests
Ladies and gentlemen
This annual gathering has again attracted the who’s who of mining from around the world. Not only have miners gathered here in their numbers but, indeed, there are also financiers, analysts, investors and policymakers, amongst others, who have come to explore the opportunities in mining on the African continent. And so I am honoured to be part of this year’s Mining Indaba.
This Indaba takes place at a time when the signs of recovery from the worst global financial and economic crisis since the great depression are emerging, with the International Monetary Fund (IMF) predicting stronger than expected world growth in 2010. The African continent covers 20% of
the world’s landmass but is host to the lion’s share of the world’s known mineral resources and reserves, including 90% of platinum group metals, 65% of diamonds and more than 80% of manganese, amongst others.
Given the considerable endowment of mineral resources and reserves, which remain largely underexplored and underdeveloped, this Indaba could not be more important for both investors and the African people.
Ladies and gentlemen, it was exactly 20 years ago today, on the 2nd of February 1990, that the then President of apartheid South Africa, FW de Klerk, who was under immense pressure both internally and from the rest of the world, announced the release of Nelson Mandela and other political prisoners and the unbanning of the African National Congress (ANC) and other liberation organisations who had been waging a decades long struggle for the country’s freedom.
Those events 20 years ago led to our first democratic election in 1994 and now, after four successful elections, there can be absolutely no doubt that South Africa is a stable democracy with a legacy of strong institutions and a regulatory framework which ensures that the rules are clear and transparent for all who want to do business and invest in our country, and our mining industry specifically.
So, too, has a fresh and steady wind been blowing over the African continent, a wind which has seen one country after the other ushering in democracy and the benefits which it brings for doing business. Yes, we have many challenges but these are not insurmountable and we are working hard to overcome these challenges and adapt to the ever changing conditions.
There have been some significant changes since you last gathered here at the beginning of 2009. Our national elections last April ushered in a new administration under the leadership of President Jacob Zuma, who decided that the then Department of Minerals and Energy should be split into two focused entities, one the Department of Mineral Resources and the other, the Department of Energy. The President’s decision has led to us being more focused on the mining and minerals sector in South Africa.
My assumption of duty coincided not only with the global financial and economic crisis, but also with the review of the Mining Charter. Since the dawn of democracy in 1994, South Africa has built a resilient economy with sound economic and fiscal policies. However, in the past year, in line with the rest of the globe, our economy has been under pressure, and in particular the country’s mining sector has experienced tremendous pressure, due mainly to poor demand for most mineral commodities, leading to reduced production.
In response to the harsh economic downturn, my department established the Mining, Growth, Development and Employment Task Team (MIGDETT), a tripartite initiative consisting of various organs of government, business and organised labour, whose immediate objective was to recommend short term interventions aimed at minimising the effects of the crisis on the mining industry and containing job losses.
The Task Team has completed phase one of its mandate and we are proud of the fact that, by working together, we were able to contain job losses to less than 50 000, representing half of the initial estimates. This demonstrates that collective leadership of the mining industry in South Africa by all stakeholders continues to yield positive results. Having completed the first task, MIGDETT has now, in line with its initial two stage mandate, been tasked with developing a strategy which will position South Africa’s mining industry for sustainable growth and meaningful transformation.
The development of this strategy will culminate in a mining summit by the end of the first quarter of 2010. To this extent, working groups have been established on competitiveness and transformation. In the past, some treated competitiveness and transformation of the mining industry as mutually exclusive, but I am glad to say that we have reached consensus with key stakeholders that these attributes are mutually reinforcing.
To achieve our national strategic objectives within the sector, each of the stakeholders has to examine its functioning carefully. In this context, and in order to fulfill its part towards a competitive industry, my department has already embarked on a reengineering programme with respect to our licensing administrative process. This process reengineering seeks to further enhance our turnaround time in issuing licences, achieve more transparency and root out any prospect of corruption in the system.
We are working toward reducing the turnaround time for mining rights applications from the current 12 months to six months, while prospecting right applications will be reduced from six to three months. The purpose of this intervention is to ensure that we have a streamlined and clear administrative process.
It is stating the obvious that we are concerned about weaknesses in occupational health and safety performance in the mining industry. We cannot underestimate the misery brought to widows and orphans due to the failure to comply with health and safety standards. There is an urgent need to eliminate the fatalities and injuries that have characterised our mining industry for more than a century.
My department is in the process of introducing critical amendments to the Mine Health and Safety Amendment Act, which are intended to further mitigate the high injuries, ill health and fatalities in the industry. The department will be working with all stakeholders to finalise and implement this revised legislation.
I am acutely aware of the requisite skill shortages in the industry, particularly of mining engineers, technicians and inspectors. In the weeks and months ahead we have to seriously examine our options and collectively embark on effective solutions to deal with these critical shortages. To this extent, I am implementing a Human Resource Development Plan that addresses the severe shortage of the abovementioned skills.
This includes bursary schemes, learnerships and internal training programmes. The Mining Qualifications Authority has started implementation of training programmes for more than 100 mining inspectors. At the same time, in partnership with Wits University, we are currently rolling out the mine inspector training programme as a long term measure. I am also happy to announce that we have held discussions with the Australian Minister for Trade, Honourable Simon Crean, and we have agreed to cooperate in the area of skills development, especially given that it is such a priority for us in South Africa.
South Africa has a distinct comparative advantage, boasting a well established mining industry, which has been in operation for over a century. As a result, we have some of the deepest mines in the world. Correspondingly, our relative cash cost structure features within the bottom quartile as compared to other established mining jurisdictions. Further, the “real estate” in terms of prospectivity for discovery of new mineral deposits in the country, using modern exploration methodologies and technology, presents further investment opportunities in the mining industry and will prolong the life of the industry, which remains a sunrise industry for South Africa.
In terms of our national policy, we remain committed to pursue value addition of mineral commodities in South Africa, which also presents prospects for investment and creating decent jobs. I intend to serve the beneficiation strategy to our cabinet during the first quarter of this year. The objective would be to use the strategic role of our mining sector to maximise both downstream and sidestream beneficiation opportunities with a view to ensure job creation and growth promotion. But I also want to caution that, for us, beneficiation does not mean that mining companies themselves must leave their core business of mining to beneficiate. We must create an enabling environment for other industries to arise.
Investment in beneficiation is indeed possible in South Africa. I also am encouraged by the investment of Matla Beneficiation Company, a Black Economic Empowerment (BEE) company, which is constructing a diamond cutting and polishing firm in the Eastern Cape. This company has attracted special skills for cutting and polishing of small diamonds, which have previously not been economically cuttable in South Africa. The Matla firm is established in one of the country’s poverty nodes, creating real opportunities for employment of up to 120 in the first two years, while contributing to the country’s economic growth. We hope that the company will be operational by March 2010.
I am under no illusion that, together with our other stakeholders in the industry, we have much hard work to do to achieve our strategic national goals. The road ahead requires more boldness, business acumen and close collaboration in order to implement the country’s mineral beneficiation drive.
South Africa is indeed alive with possibilities and ready to do business with the world, including the rest of Africa. In conclusion, this is a very special year for South Africa and indeed the entire African continent, as we host of the FIFA world cup from 11 June. All South Africans are keenly awaiting the arrival of guests and share with them a truly and uniquely African experience. This will be an occasion to showcase our national capabilities including our natural resources. We hope to see all of you attending this Mining Indaba back in the country for the World Cup!
Welcome to South Africa.
I thank you.
