Chairperson and Members of the Portfolio Committee on Mineral Resources
Minister of Mineral Resources
Ladies and gentlemen;
It is on this day in 1977 that Mama Winnie Mandela was banished by the Apartheid Government to Brandfort in the Orange Free State. Thanks to the ANC Government no such atrocity will ever be perpetrated against our citizens. This year of Oliver Reginald Tambo let us remember how he emphasised the beauty of our country, together with its rich tapestry of cultures that we must appreciate in our democratic South Africa.
General State of the Economy: The health of our mining sector is very critical to the economic growth and development of our country, especially now that our country’s economy is operating under severe strain. It is our national duty to pay careful attention to all and each sector of the economy to ensure economic recovery, to boost job creation, and to create an environment conducive to sustainable development and poverty alleviation. There is no doubt that our country has all and every potential to be prosperous and globally competitive.
It is therefore up to us, the political leadership, to work with our fellow citizens, to inspire all other leaders in business, in labour movements, and in the civil society at large to mobilise for meaningful, sustainable, and effective development of our national resources for the benefit of our nation.
It is important to note that the global economy, at present, is subjected to a mix of global social and geo-political forces rendering its growth and stability vulnerable. Such systemic instabilities affect our small open economy negatively. As such we need to double our efforts to mindfully navigate the prevailing stormy seas of the international political economic environment.
In particular, we need to pay sustained attention to the structural fault-lines of our national economy so as to minimise vulnerability, volatility and underperformance. The radical economic transformation agenda must therefore mean inclusive growth and flow through of financial benefits to the broader society especially, the owners of the mineral wealth of our country.
Economics of Mining industry: Following a harsh downfall on commodities prices over the past few years, it is now generally expected that commodity prices are on a slow recovery path. Provided the global GDP growth remains stable, it is likely that prices will stabilise and investment and production stability will resume in due course. Of course commodities face different market conditions, and it is unrealistic to generalise and expect uniform trends across all commodities.
Whilst some challenges remain within our mining industry, we have much to work with. The catalogue of current issues that require both political and technical leadership includes a range of items such as the need to boost exploration and prospecting investment, matters of health and safety of the workforce, rehabilitation of the environmental legacy, illegal mining, mineral beneficiation and the revitalisation of the mining regions across the country.
The over-arching issue for our country, and indeed a far more strategic issue, is the need to revive the reputation of our mining industry and its global branding. I would like to deal with these issues in some detail in this House, of course within my time limit.
Back in 2014, President Zuma highlighted the urgency of dealing with the mining sector’s challenges. It is clear that the prosperity of the nation and our social welfare are greatly affected by the developments in the sector. This is particularly so if we consider the vast opportunities and the great potential that the mining sector has to offer. Careful analysis of our modern economic history would show that this sector has had a pivotal role in the modernisation of the SA economy.
It is therefore a national imperative that we focus on the ways and means of unlocking the inherent potential of the sector at the same time that we deal with the outstanding structural issues facing the industry.
Transformation: In spite of sustained emphasis on transformation over the past two decades and notwithstanding the general agreement on the need for the broadening of ownership as well as deepening of operational involvement by the black majority in this sector, our achievements leave much to be desired.
Sustainable transformation is a complex challenge that requires full and meaningful commitment from all stakeholders. Yet, until and unless this issue is effectively resolved the industry will continue to face an internal risk and volatility.
The medium to long term prosperity of this sector demands of all stakeholders to embark on a transformation path that is conducive to fairness, stability and business success. I am also pleased to report that the DMR together with the IDC and PIC have held several seminars to promote Broad Based Black Economic Empowerment in the sector. Accordingly, we should by June 2017 roll out a festival of mining activities around the country and I am excited about the prospects.
Beneficiation Imperative: At the same time, it is self-evident that our national interest calls for a systematic and integrated mineral beneficiation drive. It is generally agreed that we cannot continue to mine and export ore and other raw materials for processing elsewhere. We can surely expand the benefits we can derive from the beneficiation of our natural resources. There is therefore a need to increase value addition to our minerals before they are exported, in line with government’s stated mineral beneficiation and industrialisation priorities.
It is stating the obvious that a sustained focus on viable beneficiation strategies will present enormous investment opportunities in the country for both South African and foreign investors. As I have emphasised in the past, we need to re-examine notions of beneficiation, and broaden our definition in line with the realities of socio-economic and financial benefits that both ‘up-stream’ and ‘down-stream’ opportunities offer in each and every commodity.
Clearly, such opportunities differ from commodity to commodity, and no single template would fit all the commodities. Today South Africa enjoys a considerable range of opportunities for integrating our mineral beneficiation and industrialisation programmes in order to enhance the pace of social development and economic growth. Such an approach to mineral beneficiation and industrialisation calls for a much higher degree of coordination within the public sector and across the private and public sectors.
Health and Safety of Workers: It is a fact that South Africa’s mining, in a number of commodities, is getting deeper and deeper under-ground every year. The trade-off between safety and short-term productivity and profitability becomes more and more pressing. Conventionally, the safety of the workforce has received secondary attention - short term profit is put first! This needs a paradigm shift, something that needs urgent and ongoing attention.
The mining sector has increasingly being giving more attention to health matters as a result of the promulgation and implementation of the Mine Health and Safety Act as amended. However, the sector should continue putting more effort to reduce on the number of occupational diseases reported by the mining sector mainly with Pulmonary TB, Silicosis and Noise induced Hearing Loss, injuries and fatalities. Honourable Members: the “Golden Rule” of our mining culture needs to be for all stakeholders to reaffirm their commitment to implementing effective measures to realise the goal of “zero harm”. The achievement of this target will also enhance the global reputation of our mining industry.
Today, over 15 months later, we are still dealing with the Lily Mine disaster. The families of Pretty Nkambule, Yvonne Mnisi and Solomon Nyerende would be justified to say that both as a country and the mining industry, we have failed them.
Our commitment, however, is that we shall not give up the efforts to retrieve the container and recover the bodies of the three comrades. All we need is the cooperation of all affected parties and the suspension of our differences in this matter. Let us unite around our proud South African flag until this matter is resolved. The inquiry on this matter is on-going even though it has taken unreasonably long. We will await the outcome and act accordingly thereafter.
Honourable Members, when it became clear that the Lily Mine management and the Business Rescue Practitioner were unable to fulfill their promises and financial obligations I went around with the President of the Chamber of Mines, Mr Mike Teke to raise funds towards the ex-gratia payment for the families of three trapped miners and the 75 rescued mineworkers on that fateful day. I am pleased to report that the three families have since been paid R200 000 each and 58 out of the 75 mineworkers also received an initial R10 000 each with a R40 000 balance still outstanding per worker. The remaining 15 employees were contractors whose banking details are still being processed.
We want to thank the Rand Mutual Assurance for the R100 000 contribution they made; the Chamber of Mines of South Africa who contributed R600 000 and the IDC who contributed R800 000.
I must emphasise that the amounts given to the families and mineworkers were ex-gratia payments only in addition to other benefits and entitlements due to them. More work still needs to be done in this Lily Mine matter and we shall not rest until we find a mutually acceptable solution.
Illegal mining: Illegal mining continues to cause socio-political as well as economic concerns. Such activities result in loss of life, environmental degradation and a significant loss of revenue to the country and the mining sector. Mining without a permit or right is illegal in terms of the MPRDA, and as we have reported widely, the Department has taken decisive actions to deal with this matter.
We also conducted consultations and a workshop which included all stakeholders and the zama-zamas in particular. The workshop resolutions are being processed and implemented where appropriate.
Rehabilitation of Derelict and Ownerless Mines: The rehabilitation of derelict and ownerless mines together with the concurrent rehabilitation of the existing mines offer a mix of challenges and opportunities. It is a historic fact that the democratic government inherited a long-standing environmental heritage of neglect, which spanned over 100 years of a conspicuous legislative vacuum. As the honourable members are aware, there are thousands of derelict and ownerless sites in our country. Whilst such sites are a clear liability, at the same time, I would like to believe that the rehabilitation of these sites might well offer opportunities for creating jobs and livelihood.
It is evident that a national programme of environmental rehabilitation of the old mines could well generate many job opportunities, potentially running into 1000s of jobs. Furthermore, in many cases, the rehabilitated areas could be further used for agriculture and other economic activities.
As importantly, in order to avoid any further accumulation of such mining sites, it is vital that we engage our mining companies to implement concurrent rehabilitation practices. This practice will also further enhance job creation opportunities in the mining sector. I am glad to note that there is a growing number of mining operations that have begun with such practices. Of course, many more need to join the programme of concurrent rehabilitation of the mining sites.
Honourable Speaker, we look forward to the support of this House, and that of the Portfolio Committee on Mineral Resources, as we discharge our mandate in the current Administration.
I am glad to report to this House that in my analysis of the various regions and provinces, it is encouraging to note the vast potentials in nearly all provinces and regions. For example, whilst diamond mining in Namaqualand has come to end, but the region has the largest single zinc deposit called Gamsberg. Clearly, part of the solution to the decline of the region lies in the rapid replacement of the old activities with the new ones. This in turn calls for a much higher level of coordination between the private and public sectors. In particular, when we can integrate our mining and mineral beneficiation activities, and further coordinate them with all the associated infrastructural requirements. It is well within our reach to create hubs of mining and mineral beneficiation, and even agricultural development around the country.
It is our collective national obligation to make sure that our substantial mineral wealth is utilised to generate socio-economic benefits and bring about integrated development for our nation. Our communities across the country look to us to achieve this. To this end, we need to draw lessons from our past century of mining, to avoid the undesirable consequences, and to promote a mining industry that is socially progressive, environmentally sustainable, and economically competitive.
Given the developments in the recent past in our mining sector, it is clear that we need to place our sustained emphasis on creating an enabling environment along the lines articulated in the NDP. We have much to be optimistic about, and our mining industry has the potential for yet another robust and expansive phase over the next few decades. It is up to us all to join forces in enhancing collaboration and cooperation for the benefit of our nation. Our success will need to be driven by our commitment to a constructive use of the existing experience to unlock the potential inherent in our considerable national resources endowment.
I thank you.