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Cabinet Colleagues, President of the National Union of Mineworkers, James Motlatsi, and acting General Secretary, Gwede Mantashe, President of the Chamber of Mines, Bobby Godsell, Directors-General and representatives from various Government Departments, union delegates and employer representatives, ladies and gentlemen:

I would like to begin by thanking the National Union of Mineworkers for calling this summit. You have thrown the problems in the gold mining industry into sharp focus. You have forced Government and employers, not to mention workers, to pay special attention to the crisis.

And there is indeed a crisis - both a short-term one resulting from the sharp drop in the gold price, and a longer term one arising from the simple fact that our gold reserves, especially at this price, cannot last forever. Particularly important is the impact of this crisis on ordinary workers and their families, and on the most underdeveloped areas of our country and the Southern African region.

Unfortunately the effects of the sharp fall in the gold price are felt not only by shareholders, by the Receiver of Revenue and by the economy. Most importantly they are felt by tens of thousands of miners who face the prospect of losing their jobs and by the many family members who depend on them. It is the human impact of this crisis that hurts most.

Government is determined to wrestle with the issues and to play its part in helping you, workers and employers, to find realistic, sustainable solutions. We in Government have been putting our heads together to think of new ways of tackling the crisis. I will come to some of our suggestions in a moment.

But let me start by addressing some of the difficult realities we must face. In short the bad news first! There are three harsh truths which I hope we all accept.

Firstly, we must accept the reality that the gold mining sector is in long term decline. Our gold reserves cannot last forever. Unless there is a dramatic increase in the gold price - which we can pray for but which we should not rely upon - and new and better methods of mining are found, we can expect both the tonnage of gold produced and employment levels in the industry to decline. What this means is that we must focus on managing the decline of the industry and moderating the effects on ordinary people. We must manage the decline, not fool ourselves into thinking we can reverse it.

The second harsh reality, which flows from this point, is that government is of the view that it would be wrong to use taxpayers money to artificially maintain production and employment in the gold mining industry. The focus of our efforts must be on supporting growing industries and new areas of job growth. The gold mines have, over the years, received numerous direct and indirect subsidies. Over the years these have been gradually reduced, and justifiably so. In short, we are not coming to this summit promising subsidies or bailouts to the gold mines.

The third harsh reality is that while government can play its part in tackling the crisis, the main burden lies in the hands of management and workers. The biggest challenge is for workers and management, but especially management, to find ways to boost production and reduce costs. Only by doing this can we soften the job losses we are facing and ensure a viable, sustainable future for the industry.

I do not present these points to suggest that government can do nothing. Rather I am saying we must address the crisis with a sense of realism about what can and cannot be achieved.

In preparation for this summit, Government has put a great deal of effort into examining and re-examining its policies. We hope that we can emerge from this meeting with a way forward. A positive outcome here will give us hope that the broader Presidential Jobs Summit will also be fruitful. Indeed, as we meet today to consider gold mining we must remember the general context of high unemployment throughout the economy. As the President said at the opening of Parliament, " jobs, jobs and jobs" must be a key challenge for government. It is a challenge which will demand sacrifices from all.

But today our focus is on gold mining. As Government we have six basic points for dealing with the gold mining crisis. The details will be presented during the course of the Summit by the Director-General of Labour, on behalf of government. I will focus on outlying this six point plan briefly. It is intended to assist the parties in tackling the crisis, and not to replace your own efforts.

First, Government will continue the work begun by the Deputy President and lobby key central bankers internationally. Greater clarity regarding their intentions in relating to gold holdings may have some impact in at least stabilising, and hopefully boosting, the gold price.

Second, we have made great strides in developing a Social Plan agreement at NEDLAC. Provided we can get the continued co-operation of unions and employers we will take steps to fast-track and finalise the Social Plan agreement at NEDLAC by the end of March.

Let me say here, as an aside, that certain regions, such as the Eastern Cape and Northern Province, face a range of difficulties - not only the decline in gold mining but also unsustainably high employment levels in parts of the civil service. The social plan agreement being finalised must therefore go beyond mining and managing the decline of the sector. It must also attempt, as the draft agreement does, to have a developmental focus - preparing people and regions for new and different types of work in the future.

Third, we will take urgent steps to improve the support services provided by the Department of Labour to retrenched miners. In particular we intend establishing multi-disciplinary rapid response teams to assist on request at affected mines. We will also make arrangements for more efficient UIF payments, and explore using TEBA facilities in this regard.

Fourth, my colleague, the Minister for Trade and Industry has undertaken to continue to search for resources to encourage mining towns to adapt to the new realities. As a first step we want to encourage local authorities in towns like Virginia or Stilfontein, to name only two, to plan now for the future.

Fifth, with your assistance we intend to do a cost -benefit analysis and review of certain environmental and related regulations. While not committing ourselves in advance to changing these regulations, we do want to evaluate the impact these changes may be having on jobs.

Sixth, we are prepared to support the urgent establishment of a small, high-powered, Gold Crisis Committee if such a concept can get the backing of the union and the employers. Government is prepared to facilitate an urgent meeting to agree on the composition and terms of reference of such a committee. We would like to see all future planned retrenchments of over 10% of the workforce of any gold mine being referred to this committee for consideration prior to it being negotiated in terms of the IRA.

We envisage such a committee looking at and managing possible downscaling in the industry. We also see it developing a standard set of steps, information disclosure requirements, and timeframes which would govern all mine retrenchment proposals. Such a committee would focus on reducing job losses to the bare minimum, and improve both the process and our ability to assess alternative options. We can, by agreement, take immediate steps to establish such a committee.

Why do we propose a committee rather than the Standing Commission suggested by NUM? There are two main reasons. We may not want to pre-empt the longer term restructuring of the industry and the idea of a permanent advisory body mooted by my colleague Minister Maduna. And we are convinced that a committee can be established rapidly, and by agreement, to deal with the urgent crisis we face.

If we are serious about addressing the crisis we must ask not only what government plans to do but also what employers and workers plan to contribute to finding a way forward. As has been said before - ask not what your country can do for you.....ask also what you can do for your country.

We want to see employers approaching the downscaling responsibly, avoiding retrenchments except where absolutely unavoidable. We want to see employers contributing to training and retraining efforts, to development initiatives in rural areas, and assisting mining towns to adapt. We welcome the Chamber's announcement of a moratorium, albeit a brief one, on retrenchments. Hopefully they will extend such a moratorium pending the rapid establishment of a downscaling committee.

Labour relations problems continue to bedevil many mines. Some mines have taken laudable steps to change work practices, improve employee participation, boost productivity, and reduce or abolish management fees to head office. But many other mines still have a long road to travel. Employers need to pay attention to the quality of management in some mines.

But the union equally needs to commit itself unreservedly to improving productivity. In particular the parties need to work together to boost productivity and fast-track the implementation of productivity agreements entered into, especially where such agreements have become bogged down. However unpopular such agreements often are, they are essential to softening the impact of the crisis. We must also accept that many jobs can be extended by introducing, especially in shafts near the end of their life, smaller scale operations organising work along different lines.

As a nation we have shown that we can find solutions to difficult problems. There is no reason why we cannot find a way forward in this situation. But it will require leadership, compromise and goodwill from all. I hope to be able to report back to Cabinet that our deliberations at this Summit have been fruitful.

Thank You and I trust everyone present will approach this Summit in the spirit of openness, compromise and with the need for meaningful solutions uppermost in our minds.

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