B Sonjica: African Mining Partnership meeting

3 February 2007

Honourable Ministers,
Distinguished guests,
Ladies and gentlemen

It is my pleasure to extend to you all, a warm and hearty welcome to
Pretoria, the capital city of South Africa and indeed to the fourth edition of
the African Mining Partnership. Our gathering today chimes with and echoes the
call made by one of the founders of the African National Congress (ANC)
Pixley-ka-Seme, who more than a century ago, in 1906 to be precise,
prophetically declared that, "The giant is awakening". This he said referring
to Africa.

Africa's renaissance has to be predicated amongst others on harnessing
Africa's wealth in mineral resources as a catalyst for her development, peace
and freedom rather than a curse that in the past bonded her to slavery,
conflicts and underdevelopment. I cannot agree more with George Ayittey,
distinguished Economist in Residence at the American University in Washington
who asserts that economic reform without concomitant political reform or
freedom is an exercise in futility.

At the conclusion of this fourth AMP meeting, we should reflect on what we
have achieved since its inception in 2003. The rationale behind the formation
of the AMP is to drive mining related initiatives that should contribute to the
New Partnership for Africa's Development's (NEPAD) general objective of
reducing poverty levels on the African continent. To this end, projects in the
following areas were adopted during the first executive committee meeting held
in Accra, Ghana in 2005:

* beneficiation
* artisinal and small scale mining
* environmental/ sustainable development
* Human Resource Development (HRD)
* promoting foreign investment and indigenous participation in mining
ventures.

Indeed if these projects were well implemented and managed, they could go a
long way towards laying the foundation for greater participation in mining
related ventures by all people on the African continent. Our people in Africa
have, for many years, stood by and watched developments around them, but we now
expect them to participate in their economic emancipation. Although this
process has challenges, it is these challenges that need to be confronted so
that our people can take part and pride in their development. With proper
investment and skills development, our people can participate meaningfully in
changing the economic landscape of Africa.

There is wide recognition for the need to put in place measures that will
stimulate economic empowerment of our people, especially those living in rural
areas. It is perhaps for this reason that the projects adopted tend to focus on
rural communities.

I am told that although good project proposals were submitted as far back as
2004, little success has been recorded in most of these projects due to lack of
funding and the fact that the AMP is run on ad hoc basis. While we always
proclaim our commitment to ensuring that the projects take off the ground, it
is rather difficult if we do not have personnel fully dedicated to this task to
ensure that this exciting phase we have entered into in the evolution of our
continent is realised.

Mining continues to be the mainstay of most economies in Africa,
contributing significantly to Gross Domestic Product (GDP), to foreign exchange
earnings and employment. This should dictate the premium we place in trying to
encourage and improve the mining sector in Africa. It is rather unfortunate to
note that despite Africa being a continent with rich mineral endowment,
exploited mainly by powerful multinational companies through organised capital
intensive mining methods, the continent continues to record poor economic
performance, relative to other regions.

Mineral resources have thus failed to create right levels of employment,
eradicate poverty and improve standards of living for the masses of our people.
But it must be appreciated that African countries inherited economies that are
backward, skewed and underdeveloped. However through institutions like the AMP,
African states must embark on the transformation of the inherited economic
structures.

It is important as African Ministers that we ensure that the policies that
we drive on behalf of our governments make development a reality for the people
of the continent. It is for us to enlighten the mining companies and investors
that the need for empowering the communities around which the very mining
happens, is not negotiable. The days of the emergence of "ghost towns" after
mining operations have come to an end, are over. There is a need to empower
communities for the post-mining era. Therefore parallel investment in
deliverable social and labour plans also becomes non-negotiable.

It is most heartening to realise that even some of our compatriots outside
government and the industry also have an interest in how we as Ministers do
what we need to do. I will quote from an article that appeared a few days ago
in one of our local newspapers written by one Kuseni Dlamini. I quote, "Africa
needs its own Organisation of Petroleum Exporting Countries (OPEC) to manage
and regulate access to its mineral resources, and to control the demand and
supply of key minerals in ways that ensure lasting benefits for current and
future generations." This is a profound statement which poses a serious
challenge for us. Hopefully it underscores what we are all about and where we
should go.

The debate about the role of AMP in the development of Africa must reach its
peak this year. No holy cows should be exempted including state intervention in
the economy to change the conspicuous lack of indigenous entrepreneurs owing to
economic distortions created by colonialism. However, the predominant view now
especially by neo-liberals, including the International Financial Institutions,
is that the states in Africa and other developing countries should reduce their
roles in economic development. Although this may be true I would take the
opposite view and argue that state intervention is necessary for development to
take place.

In the last decade or so, most African countries have undertaken economic
reforms to rejuvenate their economies though positive development philosophies
and policy frameworks. In the mining sector, a number of countries have made
efforts to reform their policies and the regulatory environment aimed at
encouraging private sector participation, attracting new capital investments,
technology and skills and stimulating exploration. These policy changes were
intended to ensure that Africa remains internationally competitive in
attracting and retaining mining investment. The implementation of these new
minerals policies offered opportunities for increased investments in the
mineral industry in Africa.

The stimulation of small-scale mining sector for job creation is also
another area of focus in the new minerals polices of the African countries.
Although a number of individual African governments have realised the need to
create a conducive environment and have crafted their regulatory frameworks to
attract investment and promote diversification of industry, there are a number
of common issues that can be beneficially addressed on a regional basis.

The formation of Southern African Development Community (SADC) Committee of
Mining Ministers recognised this need and further recognised that the
contribution of the minerals sector to sustainable development could be
enhanced by supporting joint initiatives to develop effective and transparent
regulatory and management frameworks. Since 1996, a number of representatives
from the minerals industry within SADC have been meeting to address matters of
mutual concern.

In 1998, the Mining Industry Association of Southern Africa (MIASA) was
formally established and has since been attending all of SADC Mineral Sector
Meetings and AMP meetings. Such participation has enabled the industry to make
direct input into mineral policy development in the SADC region and to make
recommendations on project implementations. Thus both the African Mining
Ministries and the African minerals industry have individually recognised the
necessity to develop the continent's mineral resources in a responsible and
sustainable manner.

In February 2003, fifteen African Mining Ministers, plus the SADC
Secretariat and the representatives of the Southern African Mining industry,
through MIASA, met in Cape Town, to workshop and put the seal of approval on
the African Mining Partnership (AMP), a forum that will drive NEPAD's
initiatives for mining and mineral-related activities. One of the most
important objectives decided upon is to develop a mechanism to bring on board
all stakeholders, i.e. to recognise and actively support the partnership.

The rush by African states to replace unattractive investment conditions
with improved mining codes and fiscal regimes that could compete with those of
other countries offering rich mineral potential should encourage foreign
investors to support the AMP initiatives. The role of mining in economic
development cannot be overemphasised. The modern economies of the United Kindom
(UK), Germany and Finland, to give a few examples, are mining based, even
though today mining hardly plays a role in these countries. Significant for
Africa is the fact that the mining profits generated can be invested in other
economic sectors.

I would like to express my profound appreciation of the efforts being made
by African countries in identifying ways, which help to develop the mining
industry in Africa. The formation of the AMP is one of those initiatives that
must be taken seriously. The essential message though is that Africa must take
charge of its destiny and shape the economy in a way that will benefit all. We
are mindful of the historic wars that ravaged many parts of the continent which
were funded from proceeds of natural resources. We have made good progress in
containing these wars, albeit Sudan and Somalia continue to be unsettled. The
prompt intervention of Ethiopia in mitigating the eruption of war in Somalia is
yet another demonstration of our efforts and willingness as Africans to bring
about lasting peace in the continent. To this end, many African countries are
committed signatories of the Kimberley Process Certification Scheme (KPCS)
which seeks to ensure a conflict-free diamond industry.

The mining industry has also contributed meaningfully in building Africa,
and there's even more opportunity for the industry to help advance the
continent to its complete emancipation, free of wars and poverty. We
congratulate the Democratic of Congo (DRC) for recently concluding successful
democratic elections, contrary to prior expectation by many across the globe.
The inclusion of South Africa, Ghana and Congo in the United Nations Security
Council is an important milestone for Africa. These countries will need our
collective support in order to be successful in this important position.

In conclusion, let me extend my apologies for the cancellation of the
mid-term review last year, which was scheduled to be held in Abuja, Nigeria.
This cancellation was a result of lack of progress in project development,
largely due to lack of funding. This demonstrates the complex situation Africa
is facing, however, I urge you all to be innovative in your engagement.

Finally, I would like to thank you my colleagues for showing support to the
AMP by once again attending in your numbers this year. I also appreciate the
presence of other countries outside the continent, namely Chile, represented by
the Deputy Minister, the People's Republic of China, represented by Minister
Sun who will be joining us later, and a representative of Natural Resources of
Canada. Further more, I hope you will enjoy your short stay in Pretoria and our
country with its many amenities and its proximity to some of the world-renowned
game parks.

I thank you.

Issued by: Department of Minerals and Energy
3 February 2007