ADDRESS BY
HONOURABLE MINISTER OF MINERAL RESOURCES
Mr SAMSON GWEDE MANTASHE
ON THE OCCASION OF THE ANNUAL GENERAL MEETING
OF THE CHAMBER OF MINES
23rd May 2018, Johannesburg
The President of the Chamber
Your Council
Executive Members
And Representative of Mining Houses
Officials of the Department of Mineral Resource present
Ladies and Gentlemen
My sincere and warmest greetings to you on this occasion of your Annual General Meeting.
As a former mineworker, now the Minister of Mineral Resources, it gives me great pleasure to address this meeting, which you have deemed important in the evolution of the Chamber of Mines post-apartheid.
It is an honour and an opportunity to me to have this moment to reflect with you as you are about to unveil your new vision, and a reconfigured Chamber of Mines – which is a representative of the broad section of companies in the mining industry. I consider my contribution as part of our Ministry’s intention to dialogue with the industry, as means to bolster our relationships and rebuild the connections that we have woven over time.
In the 86 days, today, since my appointment in the Ministry of Mineral Resources, I have sought to appraise myself with critical issues facing the industry. I have also taken the time to understand some of the challenges facing our Department.
Among the key priorities I have since identified are: First, the need to bring certainty in the areas of policy and regulation, thereby hasten the legislative framework. Second, refocus the industry and the Department on the importance of paying attention to health and safety in the workplace. Third, to confront the complexities that cloud the granting of mining rights and bedevils the applications for mining licences. Fourth, develop an effective approach to combat illegal mining together with its related criminal activities.
The Departmental Strategic Plan for 2014 to 2019, its vision and mission statements, guide our work as both the regulator and enforcer of compliance in the sector. Vision 2019 states that we want to build “a globally competitive, sustainable and meaningfully transformed mining and mineral sector”; and Vision 2030 sets the task of being “a leader in the transformation of South Africa through economic growth and sustainable development by 2030”. Our mission, on the other hand, is that of “promoting and regulating the mineral and mining sector for transformation, growth and development, and ensuring that all South Africans derive sustainable benefits from the country’s mineral wealth.”
South Africa's economy, including its financial sector amongst others, is built on the back of our mineral resources, and the people who work them. Hence mining continues remains a strategic component of economic growth and development.
Recent data supported by Stats SA shows that mining production increased by 3,1% year-on-year in February 2018, indicating a recovery from previous periods. However, this growth was reversed by the 8,4 percent plunge in mining production in March, which was a result of the serious downturn of -18 percent in gold; -8,9 percent in iron ore and -6,1 percent in PGMs.
The high number of mines and shafts under care and maintenance contribute heavily to the massive decline in both production and employment. In this regard, we will meet with companies that are culprits of these practices. We intend to discuss honestly and robustly on the use it or lose it principle, found in our law. Our mineral wealth must be exploited, not left unused, if we are to generate economic growth and impact on the development of society. It is in this context that we wish to invite mining companies that are involved in this practice to come and make presentations to the DMR on why this situation pertains.
South Africa accounts for 94 percent of known global reserves of the platinum group metals (PGMs), 73.7 percent of chrome, 29 percent of manganese, 18.4 percent of vanadium and 10.5 percent of gold reserves. As a leading producer and supplier of a range of minerals, the country offers a highly competitive investment location, enabling us to meet specific trade and investment requirements of prospective investors and business people, as we meet the development needs of our people. The country has the potential to supply a large share of the global demand for many commodities. This rich endowment of natural resources and high mineral potential can only be developed and extended through a vibrant exploration sector.
According to the Fraser Institute, an international rating agency that rates 91 mining economies, South Africa could potentially be rated at 21 overall. Currently, on investor attractiveness, we are rated number 47; and are placed number 80 in policy and regulatory framework. It is evident that the conflict in the industry around the mining charter and, therefore, failure to have the sector coalesce contributed to uncertainty and fear among investors. This has further been exacerbated by delays in finalising the Mineral and Petroleum Resources Development Act (MPRDA).
South Africa’s integration to the global economy necessitates that we heed surveys from rating agencies. We should aim to be competitive and use our competitive advantages to attract investment.
An urgent message emerging out of this environment, therefore, is that we must work hard to instil and maintain stability in the industry. Thus, ensure certainty in policy and the regulatory framework.
Uppermost is the imperative to rebuild trust and confidence in the sector, for us to return the industry to the business of mining. Hence our investment in rebuilding relationships with our primary clients: business, labour and communities; and among stakeholders as well.
In line with the call by President Cyril Ramaphosa, we have intensified our engagements on the Mining Charter. The Mining Charter is a tool for transformation, and a powerful pact between all stakeholders to contribute towards the achievement of an equal, non-racial and non-sexist society envisioned in our Constitution. Alongside the Mining Charter process, is another task team established to develop a coherent vision for a competitive and sustainable industry. Transformation and competitive growth are mutually enhancing.
The Department places importance on individual mines to engaging communities and workers to ensure that all stakeholders are part of and appreciate developments in the sector. This is borne evidence to through the ten community consultations we have thus far held, in seven provinces we have visited. Emerging out of these consultations is the lack of trust communities have in mining companies. The revolt over the land question is gradually creeping into mining.
The industry must appreciate these challenges and act not because of the DMR, but because of its commitment to transformation, inclusive growth and a better society.
We aim to finalise and gazette the Mining Charter in June, having taken onboard inputs and concerns from stakeholders across the country.
We are pleased that the NCOP, last week Friday, voted in favour of the amendments on the Mineral and Petroleum Resources Development Amendment Bill, 2013 (MPRDA). The Select Committee on Land and Mineral Resources will finalise the mandates and recommend to the National Assembly for further processing of the Bill. We have appealed to Parliament to proceed with speed to finalise the Bill.
The Ministry expects the tight deadlines to be met, because bringing finality to these processes is key in entrenching regulatory and policy certainty, which is necessary for investment, thereby attainment of sustainable growth, development and transformation in the sector and society.
Health and Safety
We must pay serious attention to health and safety. Since the beginning of 2018 a total of 33 fatalities have been reported. The 2017 calendar year was the first time in ten years where a regression in the number of fatalities was reported, with the gold sector being the leading contributor. An estimated 30% of the fatalities were from fall of ground and seismic related accidents.
The long-term sustainability of mining is dependant not only on its growth, competitiveness and transformation, but also on the lives of mineworkers.
We will host the Mine Health and Safety Summit in November 2018, to assess progress made in attaining our objective of “zero harm” and chart the way forward.
Illegal Mining
Illegal mining is a serious challenge and a danger to society. It places the health and safety of communities at risk, particularly where public infrastructure is threatened by its activities. It causes a leakage and costs both the industry and our economy greatly.
The DMR seeks to facilitate the regulation of small scale and artisanal mining, with the intention of ensuring that anyone operating outside of this framework should be dealt with as a criminal. We have been discussing with the Ministry of Police on the establishment of a specialised team that has security and technical capacity to tackle this matter.
I invite the industry to assist us and contribute to this effort.
Licensing
Licensing and applications for mining rights is fraught with greater challenges and laced with sophisticated acts of corruption. There are backlogs on new mineral right applications stretches as far back as 2012 and 2010, respectively. There are no internal systems to detect delays in the processing of mineral right application.
In line with the President, we have declared war on corruption. Aware of the level of corruption inside the Department, we encourage companies to alert the Ministry when anyone in team DMR seeks to act unscrupulously or pressure a company to collude in illicit conduct.
We are also considering other mechanisms such as, an audit and use of an efficient electronic system to manage these processes.
Skills and capacity development
To effectively address these challenges the Department must be adequately capacitated.
We have begun the process of filling key vacant positions to stabilise critical areas in policy, regulation, health and safety as well as monitoring and enforcement of compliance. We are beginning to knit Team DMR together, to serve.
Ladies and gentlemen,
Addressing South Africa’s triple challenges of poverty, inequality and unemployment, as outlined in the National Development Plan, remains an overarching priority of Government.
As Chairman Mao once declared, “So many deeds cry out to be done, and always urgently. The world rolls on. Time passes. Ten thousand years are too long. Seize the day, seize the hour.”
This is our call to you today, as we wish you well as you seek new approaches in reconfiguring the Chamber.
Thank you very much.