Mining boss calls for drive on growth
Minerals Council says industry keen to establish discussion platform
Mining industry leaders are keen to establish a new platform after the national election that can bring business, labour, government and civil society groups together to discuss how to boost the industry’s performance and set it up for growth into the future, says Minerals Council SA CEO Mzila Mthenjane.
“What is important is how we as a mining industry, and how we as business, are going to show up on the other side of the elections … and what is the conversation we want to have with the new administration about where we take the country and the contribution the mining industry can make,” he said.
CEOs and labour leaders he had met on roadshows had pointed to the need for a platform for engagement on issues that did not have to do with wages, given the challenges affecting employment and growth in the industry, he said.
“There’s a concern among leaders to see the industry growing, but there’s no common platform to have a conversation about these issues other than what was there before, which was largely a bargaining platform on wages,” he said.
Mthenjane’s comments come while plummeting commodity prices and SA’s transport and electricity crises have eroded the industry’s profits and its contribution to the tax take, and put thousands of jobs at risk.
Mining is one of the few sectors that added jobs last year, growing employment by about 9,000 to 479,000. But thousands of jobs are at risk due to plummeting commodity prices in metals such as platinum, as well as in bulk commodities such as iron ore.
Transnet’s inability to provide reliable rail service has forced producers such as Kumba to trim output.
Though capital spending in mining has recovered from its 2020 trough, much of the investment is for sustaining mining operations, particularly with the installation of renewable energy generation, rather than for expansion. That raises questions about where growth will come from in future.
But Mthenjane’s comments also come against the background of Melbourne-based giant BHP’s proposal to buy Anglo American — minus Anglo’s key SA platinum and iron ore operations — which has put the spotlight on SA’s shortcomings as a destination for mining investment.
Mthenjane, who was appointed to the position a year ago, declined to comment on the proposed transaction. However, he said SA urgently needed a far healthier legislative environment for exploration and investment in mining, with far more co-ordination across government to enable this.
SA’s share of global mining exploration has fallen to less than 1%, from more than 5% two decades ago, with huge backlogs and question marks over prospecting and mining licences.
The department of mineral resources & energy’s recent choice of a company to install a new mining cadastral system for SA was significant. It would provide certainty for the process of applying for existing and new mining rights, and bring transparency to the department’s decisions, Mthenjane said.
“But that’s only one aspect of opening up exploration … One of my biggest areas of concern is that the approval of an exploration right or even a mining
right also depends on the department of water & sanitation and the department of forestry, and on certain powers of the local municipality.
“But none of these government entities talks to one another in terms of where mining fits in as an economic activity, either in the district or the province or the country,” Mthenjane said.
Minerals Council estimates a few years ago showed R30bn of potential investment linked to exploration licences had not been finalised.
BHP’s Anglo proposal also served to highlight the urgency of investment in critical minerals, with BHP keen to access Anglo’s copper assets in Latin America. But a recent IMF report says that Sub-Saharan Africa is home to 30% of the mineral resources vital to the “green” transition, including SA with its rich resources of critical minerals such as manganese.
“Without the necessary exploration we can only speak with confidence on what we are currently mining,” Mthenjane said, urging a flexible approach to the definition of critical minerals.
SA has vanadium, platinum group metals and even copper at Phalaborwa, and the Northern Cape and Limpopo are particularly prospective.
The council is working with the department of mineral resources & energy on a critical minerals strategy that the department is developing, though there is as yet no timeline for it to be finalised.
Mthenjane said SA’s approach to critical minerals should be informed by a clear plan on how these would influence its economic development plans and manufacturing sector.
Countries such as Australia, Canada and the US have critical minerals strategies focused on securing supply as well as beneficiating their minerals.