Address by Mr Godfrey Oliphant, Deputy Minister of Mineral Resources South Africa on the occasion of the BrandSA/Financial Times Thought Leadership in partnership with the Department of Mineral Resources
5 Feb 2012
Ms Anitha Soni, Chairman of BrandSA
Mr Miller Matola, CEO of BrandSA
CEO of the Chamber of Mines; Mr Bheki Sibiya
President of the South African Mining Development Agency (SAMDA)
Ms Nicky Newton-King, Chief Executive of the Johannesburg Stock Exchange (JSE)
Valued Mining sector executives
Members of the Diplomatic Corp
Bureau Chief of the Financial Times and our esteemed Programme Director
Senior Government officials
Ladies and Gentleman,
It is indeed a pleasure and an honour for me to address you all as we converge for the 2012 Mining Indaba. Let me first and foremost thank the BrandSA for conceptualising such an idea and arranging this progressive forum. Indeed it is a great platform for us to discuss and share ideas and challenges in the mining industry and strategise on a way forward.
This year’s Mining Indaba takes place in the back drop of the African National Congress Centenary celebrations, a year which this massive democratic movement calls for Unity in Diversity!
It is amazing how time flies and perhaps the Nobel Laureate for literature Nadine Gordimer is correct in observing that “time is change; we measure its passing by how much things alter.”
Have we indeed changed?
I invoke Ms Godimer’s words as I would like you as key stakeholders in such a pivotal sector in the economy of this country to honestly look as to how much “things have altered” in this sector.
Last year the Beneficiation Strategy was adopted here in South Africa in the context of a period of decent and sustained economic growth that was interrupted by the global economic recession. This growth however, and the over 100 years of mineral exploitation have been sufficient to address the triple challenges of unemployment, growth and poverty alleviation.
There are multitudes of studies into our mineral endowment as a country, some estimate the value of our non-energy minerals to be in excess of US$2.4 trillion, making us the wealthiest mining jurisdiction.
But, we know that too much of this mineral wealth is expected as raw ore, while we import manufactured product from those same export destinations. This is essentially an exportation of jobs and economic value.
While we note that there has been some improvement in the share of beneficiated product in our export basket since the 1970s, we are still not realising the considerable potential presented by our comparative advantage in minerals.
Our New Growth Path and the associated Industrial Policy Action Plan, call for a paradigmatic shift in our mineral exploitation so as to maximise the long term returns from our endowment.
We need to increase the level of the beneficiation of strategic minerals in a way that will align those efforts with our industrial development and economic growth imperatives. This means a value chain focus on enhancing the enhance value of exports, stimulating investment in manufacturing, and creating opportunities for sustainable employment creation. It is also the intention of the beneficiation strategy to contribute to the development of another key jobs driver in the New Growth Path, the knowledge economy, through increased R&D and innovation and the development of competitive advantages as linked to the priority value chains.
These priority value chains are:
- Iron ore and steel
- Energy commodities
- Autocatalytic converters and diesel particulates
We have completed implementation plans for the first two and are in the process of finalising the last three.
As we continue to introspect as the regulator, the department is currently engaged with the review of the Minerals and Petroleum Resources Development Act (MPRDA). This is aimed at improving the current construct of the Act to remove ambiguities, make provision for consultation processes and streamline the licensing processes. In this regard we will be strengthening the law in areas where it allows the Minister to invite applications for mining rights in areas that were previously granted, issued, revoked or even expired. The amendment would include strengthening of regulation of the environment in respect of minerals and mining.
The process is coming to completion and the department is in the process of conducting community road-shows.
Ladies and Gentlemen
Transformation of the mining industry remains a challenge. The sector has not made meaningful change with regards to:
- Employment equity – at top management level there is very scant HDSA participation, particularly by Black women. Most companies have targeted White women as their preferred HDSAs and have them in numbers.
- HR Development – key positions in the mining sector are still white and male dominated. Few workers attend ABET classes. There are not enough bursaries to benefit communities where mines are operating,
- Mine community development – mines implement non-sustainable income generating projects that are not yielding any benefits to the communities. Lack of land is often used as an excuse not to implement mine community development projects. Most projects are not creating any jobs. There is no provision for home ownership for employees in the labour sending areas.
The Department has developed and approved very important tools for the management of the environment in the mining industry, and ensuring South Africa remains in line with best practice. We are currently in the process of preparing these tools for public dissemination and stakeholder engagement. These include:
- Sustainable Development through Mining: Strategic Framework.
- Mine Rehabilitation Procedure Manual.
- Regional Mine Closure Strategies of the Witwatersrand Goldfields.
- Mine Environmental Management Guidelines.
- Research report on the ownership of mine dumps in Gauteng Province.
At COP 17 / CMP 7 held here in South Africa, parties agreed on a second commitment period the full package of support to developing countries in their adaptation efforts including the Green Climate Fund, an Adaptation Committee designed to improve the coordination of adaptation actions on a global scale, and a Technology Mechanism, which are to become fully operational this year.
At the COP17/CMP7 South Africa re-committed itself to sound environmental management and a diversification of its energy mix, but made clear that this does not mean an abandonment of coal. The COP deliberations significantly advanced the future role of technologies around carbon capture and storage, and this will be a significant opportunity for South Africa going forward.
The Department has also embarked on the research project, “A Strategic Mine Water Management Programme for the Prevention of Water Ingress into Underground Workings”, which seeks to prevent ingress of surface water into the underground workings, manage the decant of mine-polluted water, minimise the cost of pumping and treatment of extraneous water, protect its valuable mineral resources and underground workers, and to prevent environmental damage. This is also as part of implementing the recommendations of the Report of the Inter-Ministerial Committee (IMC) on Acid Mine Drainage.
Mining has been taking place in South Africa for over a century now, and there is a long history of disregard for health, safety and environment in the mining of the mineral resources which we must now address.
South Africa has thousands of what we call derelict and ownerless (D&O) mines, or mines whose owners are neither operating nor maintaining the site. In most of these cases, the original miners have left the mining industry and in some cases they have even left the country.
The Department developed a strategy for the rehabilitation of the D&O mines, and the strategy is currently being implemented.
Asbestos mine sites have been prioritised for rehabilitation due to the risks that these sites pose to the nearby communities.
In addition to these sites, the gold and coal mines have also received the Department’s attention due to the problems related to the formation of Acid Mine Drainage.
Most of the mines affected by AMD challenges are in Mpumalanga and KwaZulu- Natal. The Department has the Mpumalanga sites where AMD problems were reported and prioritised sites have been prioritised sites for rehabilitation.
As we engage on how we take foreword the sector we also have the responsibility to ensure that the lives of mine workers are secured. The department has consistently maintained that if mines cannot mine safely then they should not mine and all.
Through the Mine Health and Safety Council, the department hosted a Summit with Stakeholders to craft tangible actions that the South African Mining sector needs to take to achieve Zero fatalities. Much more work and vigilance is needed in this area as we can never put monetary value to peoples’ lives.
On that note Programme Director let me once again Thank You all for attention and wish you well in all other deliberations you will be undertaking during this Mining Indaba period.
I thank you.
Issued by: Department of Mineral Resources
5 Feb 2012
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