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Trevor Manuel: Mining industry must innovate to survive

Johannesburg – Mining is core to defining the economy and industry players need to rethink the sector to make it sustainable for the future, said Trevor Manuel.

Manuel, who was speaking at the launch of JSS Empowerment Mining Fund at the law firm ENS Africa in Sandton on Thursday, explained the importance of innovation in the sector.

He mentioned that the fund, founded by JSS managing director Gaurav Nair, was one such an innovation that “thinks differently” in enabling transformation within the sector.

The fund presents an opportunity for junior mining companies, which are generally too small for private equity funding, to raise capital.

There is a constant theme of difficulties that mining companies have to solve, explained Manuel. These include issues of employment, economic infrastructure and environmental sustainability, among others.

“When we look at issues of education, training and innovation, you have to look at how we can make mining better and recognise the importance of the mining sector,” said Manuel.

READ: Manuel: Corruption, non-compliance dogging SA mining

The mining sector is a “huge” employment creator in the country with over 460 000 direct jobs, but it is accompanied with negatives.

These include social issues. “We need to talk about these things because we have the opportunity to innovate what happens in mining to ensure we have a brighter future.”

Further, the industry has been impacted by dramatic changes in commodity prices. Coal, with a contribution of 30% to revenue, saw spot prices come down 7% in the past three years. Similarly the gold price has come down significantly.

Platinum Group Metals (PGMs) are also being challenged, with the idea that vehicles of the future will not require catalytic converters.

“All of these things have an impact," said Manuel. 

He added that changing electricity prices, wage battles, water licences and environmental responsibilities were other challenges to the sector.

“The mining sector is not for the faint-hearted,” said Manuel.

Part of the difficulty is the slowdown in Chinese demand for commodities, this impacted investment patters and output of the sector.

“Our responsibilities include being smart about creating a sustainable and viable sector that will continue to attract investment, encourage meaningful participation and transformation,” said Manuel.

He added that mining has been the driving force of industry, economic development and cultural development over the past 150 years. “It compels us to act in particular ways and one of the ways it compels us to act in, is to innovate and ensure we concentrate on its future.”

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