By Blessing Chinagorom
South African President, Cyril Ramaphasa has said that over the last three decades, South Africa’s mining industry undergone significant transformation while currently it contributed roughly 7.5 percent towards GDP and accounted for 60 percent of its exports by value.
Ramaphasa who disclosed this at the 2024 Investing in African Mining Indaba, Cape town, South African on Tuesday revealed that during apartheid, the mining sector was notorious for labour exploitation, human rights violations, poor health and safety standards but boldy said, miners employ approximately 476 000 people.
Speaking on the challenges, Ramaphasa said, “We are all acutely aware that we face strong headwinds, and number of persistent challenges impeding mining performance, globally, commodity price volatility, high energy prices, geopolitical tensions and a global cost of living crisis playing significant role in dampening the business operating environment.
Adding that, “Domestically, the energy crisis and port and rail bottlenecks are putting serious pressure on miners’ operational costs. Illicit mining, cable theft, infrastructure vandalism place a further strain on mining output and returns. We are committed to work hard and work together to overcome these serious challenges”.
He recalled that his government last year, outlined four objectives to develop mining sector, improve its global competitiveness and harness the global drive towards sustainable development. “The first is to achieve a secure supply of electricity.
“Through the Electricity Action Plan, government has taken several critical measures to improve the performance of our existing generation fleet and to add new electricity capacity.
“The Department of Mineral Resources and Energy has secured 1 384 MW of new generation capacity that is currently in construction or already in operation.
“The Department has released requests for proposals for the procurement of 5 000 MW of renewable energy under Bid Window 7, 2 000 MW of gas-to-power and 615 MW of battery storage. Transmission capacity remains a challenge especially in the Cape provinces.
“Eskom has therefore recently published a curtailment regime which unlocks 3 470 MW of additional capacity in these provinces, and which will be essential to the success of Bid Window 7. The second objective we identified was to accelerate economic reforms to improve the operating environment.
“We have instituted a number of reforms to enable businesses to operate optimally. Since the removal of the licensing threshold for embedded generation, National Energy Regulator of South Africa has registered no less than 1312 generation facilities with a combined capacity of over 6300 MW. Around a third of this capacity supplies the mining load.
“It is encouraging that more and more mining companies, including Gold Fields, Anglo American, Seriti and Exxaro, are beginning to take advantage of these reforms to power their mining operations and curtail their operational costs. The third objective we identified was to tackle illegal mining and damage to infrastructure.
“Since the establishment of a specialised police unit, working with the defence force, we have seen a number of arrests, prosecutions and convictions of the perpetrators of this crime.
“The Department of Mineral Resources and Energy, through Mintek, continues to seal ownerless and derelict mines.
“Since 2019, the department has closed and sealed 251 derelict holes and shaft. Over the next 3 years, the department intends to close a further 352 shafts.
“Criminal activity, and copper cable theft, in particular, has had a serious impact on key rail freight corridors, including the supply of coal for export through Richard’s Bay.
“Cooperation between the private sector, Transnet and the security services has resulted in an improvement in the security situation over recent months. South Africa’s freight logistics system itself is undergoing a process of rapid and fundamental change to improve its efficiency and position it for the future”, the S’African President said.
Working with the private sector under the auspices of the National Logistics Crisis Committee, he said the government is working to overcome his challenges with ports and rail, revealing that the Freight Logistics Roadmap, which has recently been approved, sets out a clear plan to guide this process.
“By introducing competition in freight rail operations, while maintaining the state ownership of the routes, we will unlock massive new investment in South Africa’s rail system. This will support jobs in every sector in the economy, from mining to manufacturing to agriculture.
“Committed in 2023 to improve the regulatory environment by developing and putting in place a new cadastral system to assist in the operation of a modern mining rights administration system.
“Now that we’ve a preferred bidder in place, we are confident that 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”.
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On the theme of this year’s Mining Indaba which is about embracing the power of positive disruption, Ramaphasa revealed that transition to a low-carbon, climate resilient economy, society and world is one of the most significant positive disruptions of this modern age.
He added that the vast majority of the minerals that are key to the global energy transition lie beneath the soil of our continent.
“These include manganese, iron ore, copper, cobalt, nickel, platinum group metals. Africa has the potential to be the fulcrum of the global energy transition, with mining at its core.
“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 premised on strong collaboration between government and all social partners. It can’t be overstated how crucial mining sector is to the success of just outcomes, notably in regions like Mpumalanga.
“We ask you to walk this journey with us through embedding just transition principles in your Social Labour Plan projects, community trusts initiatives, and by driving innovative green technology development. Mining has crucial role to play in building the economy of tomorrow”.
Ramaphosa seeked to deepening South Africa’s collaboration with industry as his government write a new chapter in history of South African mining. “A story of inclusion, growth, transformation, innovation and one in which no-one is left behind”, the President concluded.