Mineral wealth for communities’ good
The landscampe of what is now Bokone Bophirima province was once a farmer’s haven where mielie fields stretched as far as the eye can see on a flat landscape and cattle roamed undisturbed in equally vast pastures.
But in recent years the landscape of the largely rural and sparsely populated province have been undergoing radical change.
The skyline is now increasingly being dominated by gigantic mineshafts and great, grey hills from mining activity. Slowly, the colourful sunflower fields and grazing land are being squeezed away by mining activity.
It is not by default that the province is known as the “Platinum Province”. According to its official government profile, Bokone Bophirima province “is responsible for 94% of South Africa’s platinum, 46% of the granite and 25% of the gold produced in the country.”
The provincial government says mining is responsible for more than a third of its gross domestic product (GDP).
However, the sad reality is that communities living in or around mining operations hardly benefit from the mineral wealth extracted beneath the soil around their homes.
Instead they are left to live with the devastating effects of environmental damage caused by mining operations and to scramble for scarce, lowly jobs or scrape for a living in the lowest levels of the economy.
Now Minister of Mineral Resources Mosebenzi Zwane is pioneering an initiative to change all this.
Zwane recently told the Villages, Townships and Small Dorpies (VTSD) Economic Lekgotla that the department will convene meetings with mining companies in a bid to iron out these challenges.
Zwane said close collaboration between the department of mineral resources, the Bokone Bophirima Provincial Government, municipalities and mining companies is required to ensure that social labour plans (SLPs) developed by mining companies are in line with local economic development plans and thus advance the economies of VTSDs.
He said the department, through its office in Klerksdorp, will convene a meeting within the next 60 days, “calling on mining companies who operate in the rural areas of this province to realign their SLPs in order to address the socioeconomic conditions of the VTSDs in which they operate.”
Zwane said the areas with the greatest need will be identified in conjunction with the office of provincial premier Supra Mahumapelo.
A further meeting, said Zwane, will be held with all diamond mining right holders and representatives from municipalities in which they operate.
“The aim will be to identify major projects in the communities in which they operate, and group such producers to ensure contribution to major projects, instead of various smaller projects. The same approach will be followed for the granite and slate industries,” said Zwane.
He said the department of mineral resources aims to finalise the process before the end of February next year.
“The aim of this exercise is to establish projects with a bigger impact, which add real benefit to improve the socio-economic conditions of our people,” he said.
In one of its historic documents, the Freedom Charter, the ruling ANC states one of its aims as ensuring that the country’s national wealth, which includes the minerals beneath the soil, “be restored to the people.”
“We believe that in partnership we can together improve the economies in the VTSDs, and ensure that indeed all South Africans derive sustainable benefit from the minerals beneath our soil,” said Zwane, echoing the Charter.
According to Statistics South Africa, mining was the main positive contributor to growth in the third quarter of this year.
Stats SA said gross domestic product (GDP) growth rate was 0,2% in the third quarter of this year.
“After shrinking by 17.5% in the first quarter, the mining industry recovered strongly in the second quarter, growing by 16.1%. The growth rate of 5.1% in the third quarter was mainly a result of increased production in mining of ‘other’ metal ores, in particular iron ore,” the entity said in its assessment of the economy in the third quarter of this year.
Although the mining sector has been beset by challenges including shedding of jobs in the gold sector, the global economic meltdown which adversely affected the price of platinum and labour strikes, during his budget vote speech in April Zwane painted a picture of an industry that was weathering the storm.
Zwane told Parliament that gross fixed capital formation in the mining industry increased from R18billion in 2004 to R87-billion in 2014.
He said foreign direct investment in the mining industry grew from R112 billion in 2004 to R377-billion in 2014. He further highlighted the fact that employment in the sector grew from 448 909 in 2004 to 495 592 in 2014.
He said the department of mineral resources was allocated a budget of R1.669-billion in the year under review. Zwane said the bulk of the department’s budget is transferred to entities in research and development, beneficiation and community and enterprise development.
Zwane further said they are working on a plan focused on the development of a plan to ensure that communities, workers and investors benefit from the R50-trillion estimated industry.
“The Council for Geoscience (CGS) is focused on pre-competitive exploration activities, including high resolution mapping. This will ensure that we continue to attract investment into the sector and the economy broadly,” he said.
Zwane told the VTSD Lekgotla that the procurement element in the Mining Charter is under review to help drive the procurement of locally manufactured mining goods and services by mining companies.
“This change to the procurement element will open opportunities for South African manufacturers of mining goods and services and can be leveraged to support the VTSD initiative,” said Zwane.
He said by promoting locally manufactured mining goods will further “open up supply opportunities for SMMEs to supply the major manufacturers of these goods and services as a lot of the components that go into their machines would have to be sourced locally.”
In his submission of the draft Reviewed Broad-based BlackEconomic Empowerment Charter in April, Zwane lamented the fact that change in legislation on ownership of mineral rights had not yielded visible change in the conditions of mining communities.
“Whereas the MPRDA [Mineral and Petroleum Resources Development Act] has transferred the ownership of the mineral wealth of our country to all the people of South Africa, under the custodianship of the state, a proliferation of communities living in abject poverty continues to be largely characteristic of the surroundings of mining operations,” Zwane wrote in his invitation for public comments on the draft.
Zwane told the VTSD Lekgotla that the draft amendments to the MPRDA, “which contain proposals to — among other things — boost beneficiation locally, have recently been passed by the National Assembly, and have been referred to the National Council of Provinces for concurrences.”
He said while the province is endowed with a range of minerals other than platinum, he was concerned about the lack of information, which further impacts on the growth of the VTSD economic sector.
Zwane said he has as a result directed the Council for Geoscience to establish an office in Bokone Bophirima within three months in order to avail information to residents. The Council, among other services, provides mineral development assistance to the country.
“I encourage you as the business community in the province to organise yourselves and take advantage of these opportunities,” said Zwane.
In his state of the province earlier this year, Mahumapelo said the province was in the midst of finalising the design and implementation of a Platinum Special Economic Zone [SEZ].
He said they were engaging with almost 80 international manufacturing businesses to establish manufacturing plants in the SEZ and that many manufacturers had shown keen interest in this project. He said the SEZ is expected to create thousands of jobs in the province to address its 39.7% youth unemployment and a general unemployment rate of 24.4%.