SA MINING GROWING AGAIN
REAL MINING fixed investment in South Africa grew 5,9% in the first three quarters of last year. The reason that’s noteworthy relates to a survey produced by the Chamber of Mines of SA in November 2006 that reported investments of between R5bn and R10bn had been deferred in SA’s mining industry owing to poor infrastructure and new mining laws.
In the politically charged environment of SA’s resources sector, meetings between the chamber and the Minerals & Energy Department (DME) were urgently convened and it was decided to commission a different kind of investigation into why investment in SA’s mining industry lagged world averages.
That investigation continues. However, Roger Baxter, the chamber’s senior economist, says the fixed investment figure is promising. “There was a 20% decline in 2004 and a further 13% decline in 2005. The 2006 figures aren’t inclusive of the last quarter of the year – but it’s positive.”
Baxter goes so far as to suggest that Government’s new mining laws are being implemented with more urgency – a feature reflected in the DME’s decision to update the granting of mining licences on a monthly basis.
Grumbling by mining companies continues – most recently by exploration junior Miranda Holdings – that permits are taking more time than they should.
But the DME’s latest published figures indicate a definite acceleration in permits granted. Those are licences enabling mining companies to prospect for new land or to continue mining existing land (a new order mining licence conversion). Mining companies can’t have such licences granted unless they meet, or show they can meet, certain empowerment, environmental and social targets.
The monthly figures reported by the DME show that of all applications for prospecting licences between May 2004 and June 2006 – 5 242 in total – approximately 94% have been processed. That doesn’t mean they were all granted, but the bureaucratic backlog is being tackled.
However, there remains much work to do. Just concerning prospecting applications alone, there have been 965 filings between July and December 2006, reflecting perhaps the belated improvement in SA’s exploration industry. According to the DME’s self-imposed deadline, those must be processed in six months.
Fixed investment figure is promising.