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SA remains a mining hub - expert

Feb 08 2013 19:29 Sapa
Mining

The mining industry, the bedrock upon which the country was built, is going through something like an existential crisis. (Picture: Shutterstock) (Shutterstock)

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Cape Town - South Africa remains an attractive destination for mining investment, mining lawyer Peter Leon said on Friday.

"South Africa still remains an extremely important hub for mining in Africa," the Webber Wentzel attorney told the Cape Town Press Club.

"I remain, perhaps somewhat naively, an optimist and I always tell investors... that they should continue to invest in the country because I live here, I believe in it and I think we can get things right."

Leon acknowledged that the mining industry had been through a "pretty rough time" recently, referring to the killing of 34 miners in Marikana and the announcement by Anglo Platinum [JSE:AMS] that 14 000 jobs could be shed in its scaling back of operations.

He cited preliminary findings of a Statistics SA report, which revealed in November that there had been a year-on-year decline in mining production in the past five years.

Despite decreased production, labour costs increased 9.8% in 2012, according to a PriceWaterhouseCoopers mining publication.

Leon said one of the problems was that the government's policy on mining seemed at odds with the National Development Plan (NDP).

"It seems to me that there is huge dissidence between what government is talking about at ministerial level and in terms of the Mangaung resolutions, and how this equates with the NDP."

He said someone needed to explain how the two were joined, since the NDP was the central point of the government's future economic policy.

Leon pointed out inconsistencies between the NDP and the Mineral and Petroleum Resources Development Amendment (MPRDA) Bill, which was open for comment until the end of Friday.

One of the proposals in the MPRDA bill was to promote mineral beneficiation, whereby a part of the value derived from asset exploitation stayed inside the country and benefited affected communities.

"The thinking in the ANC is this would be some sort of magic wand to deal with huge problems of unemployment and poverty we have in this country," Leon said.

"The idea would be that you industrialise; you would force the mining industry to provide strategic minerals downstream the industry at cost-plus prices, not necessarily market prices."

However, the NDP had seemed sceptical about beneficiation, raising concerns that it was energy and capital intensive, and contributed little to job creation, Leon said.

"Most remarkably of all, it [the NDP] says that beneficiating all of the country's minerals is neither feasible nor essential to developing a larger manufacturing sector."

The NDP had recommended that the MPRDA bill ensure a productive, competitive and stable mining environment.

Leon believed that the industry's difficulties could be resolved by a closer partnership between labour and the government.

"There was a period where the department of mineral resources was working in a much more co-operative fashion with the industry and labour, through the Mining Industry Growth Development and Employment Task team (MIGDETT)," he said.

The team was formed in December 2008, as a direct result of the financial crisis, to save jobs and position the industry for growth and transformation in the medium and long term.

Leon said he wished the MPRDA bill had been presented and discussed with the MIGDETT before being introduced in Parliament.

Nonetheless, he praised the effort being made by Mineral Resources Minister Susan Shabangu.

"I've seen with the current minister a great deal more effort and tripartisanship than I saw with almost any of her predecessors, bar the first mining minister in 2004," he said.

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susan shabangu  |  mines  |  ndp  |  economy  |  mprda
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