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Monday, 05 February 2024 13:49

South Africa has seen a shift from 2% to 39% black ownership in Mining |Ramaphosa.

By Lehlohonolo Lehana.

South Africa's mining industry has undergone transformative changes over the past three decades, with a shift from 2% to 39% black ownership, according to President Cyril Ramaphosa.

Ramaphosa was speaking during the opening of the 30th Investing in African Mining Indaba held in Cape Town on Monday.

The Indaba is expected to continue until Thursday.

The annual event provides a platform for deal-making and discussions on critical mining issues.

The theme for 2024 is, "Embracing the Power of Positive Disruption: A bold new future for African Mining."

To celebrate 30 years of democracy, the president acknowledged the historical challenges of labour exploitation and human rights violations during apartheid.

"Over the last three decades, South Africa's mining industry has undergone significant transformation. For nearly 150 years, mining has been a pillar of the South African economy. It currently contributes roughly 7.5 percent to GDP and accounts for some 60 percent of South African exports by value.

"Working with industry and labour, the democratic government has been able to effect a wide-ranging and sustainable transformation of the sector over the past three decades," he said.

"In 2004, the year the Mining Charter was first introduced, black ownership in the industry stood at 2 percent. Today, this stands at approximately 39 percent.

During apartheid, the mining sector was notorious for labour exploitation, human rights violations, and poor health and safety standards. Today, miners employ approximately 476 000 people. Mineworkers can organise and rights are protected," said Ramaphosa.

He added that a legal regime confers responsibility on mining companies to provide quality services and promote development in the communities where they operate.

"There are also a number of employee share ownership schemes through which mineworker participation in mining companies is being promoted."

The president outlined the headwinds in the mining sector, both globally and locally.

"We are all acutely aware that we face strong headwinds, and several persistent challenges are impeding mining performance. Globally, commodity price volatility, high energy prices, geopolitical tensions, and a global cost of living crisis are playing a significant role in dampening the business operating environment.

"Domestically, the energy crisis and port and rail bottlenecks are putting serious pressure on miners' operational costs. Illicit mining, cable theft, and infrastructure vandalism place further strain on mining output and returns.

"We are committed to working hard and working together to overcome these serious challenges. Last year, we outlined four objectives to develop the sector, improve its global competitiveness, and harness the global drive towards sustainable development.

The first was to achieve a secure supply of electricity and several measures to improve the performance of the existing generation fleet and to add new electricity capacity have been taken through the Electricity Action Plan.

The second objective of accelerating economic reforms has resulted in the removal of the licensing threshold for embedded generation, with a third of this capacity supplying the mining load.

The third objective of tackling illegal mining and damage to infrastructure by establishing a specialised police unit, working with the defence force, has resulted in a number of arrests, prosecutions and convictions of the perpetrators of this crime.

The State-owned mining technology agency Mintek has sealed 251 derelict mines and shafts, and closure of a further 352 shafts is targeted over the next three years.

Criminal activity, such as copper cable theft, has resulted in South Africa’s freight logistics system undergoing a process of rapid and fundamental change to improve its efficiency and position it for the future.

Working with the private sector under the auspices of the National Logistics Crisis Committee, the public sector is working to overcome the challenges with ports and rail, with the recently approved Freight Logistics Roadmap guiding this process.

"By introducing competition in freight rail operations, while maintaining State ownership of the routes, we will unlock massive new investment in South Africa's rail system. This will support jobs in every sector of the economy, from mining to manufacturing to agriculture.

"Similarly, by upgrading and expanding our port terminals through innovative public-private partnerships, we aim to position South Africa as a leading player in global markets.

"As government we are alive to the reality that without bold, transformative reforms to the logistics sector, mining cannot flourish. We are working hard, in partnership with industry, to ensure this roadmap is implemented without delay, "Ramaphosa said.

Regarding last year's commitment to put a new system in place to assist in the administration of mining rights, he added: "Now that we have a preferred bidder in place, we are confident that the speedy implementation of a modern world-class solution will clear the backlogs in prospecting and mining applications and pave the way for the development of new mines".

This Indaba must prioritise deliberations around how we can leverage these changes to breathe new life into mining, to strengthen mining value chains, and to enhance beneficiation.

"South Africa is pursuing a just energy transition – one that is at a pace and scale that our country can afford, and in a manner that ensures energy security and creates new opportunities for those affected.

"Our Just Energy Transition Investment Plan outlines a pathway to create new industries and support more livelihoods in the green economy.

"The delivery of this plan is premised on strong collaboration between government and all social partners. It cannot be overstated how crucial the mining sector is to the success of just outcomes, notably in regions like Mpumalanga," the President stated.

"We ask you to walk this journey with us through embedding just transition principles in your Social Labour Plan projects, community trust initiatives, and by driving innovative green technology development.

"Mining has a crucial role to play in building the economy of tomorrow. We look forward to deepening our collaboration with industry as we write a new chapter in the history of South African mining.

South Africa will not rush the implementation of its new mining cadastre, said Gwede Mantashe, minister of mineral resources and energy who added that its implementation will take place systematically over 12 months.

After four years of undertakings and shifting deadlines, the department of mineral resources and energy (DMRE) finally announced the name of a preferred service provider for a new mining licencing system and online database – commonly known as a cadastre.

The new cadastre will be provided by a consortium of three companies – Canada's Pacific GeoTech Systems, MITs Institute and Gemini GIS and Environmental Services.

The announcement came three days before the annual Invest in Africa Mining Indaba held in Cape Town.

Mantashe said the new cadastre mining licencing system will ensure transparency as "the machine" will decide whether a permit or licence is granted, or not. The new system will replace the current SAMRAD system, criticised for often being non-functional and open to manipulation.

South Africa's mining industry has questioned the DMRE's decision to appoint a consortium of three companies to develop South Africa's new cadastre instead of using the services of a tried and tested provider such as Cape Town-based Spatial Dimension. Spatial Dimension has built cadastres in more than 30 countries around the world, including in Africa.

The 12-month timeline for implementation Mantashe gave in his speech, might be optimistic to get a new cadastre up and running.

The process involves the migration of current electronic applications captured on SAMRAD, as well as a plethora of paper applications – some stacked to the ceilings at regional offices. It could also take months to train DMRE staff to use the new system and there's the possibility that the department will have to establish a tribunal to rule on duplicated and contested mining and prospecting rights.

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Video Courtesy of Presidency.