Getting underground and creating value
executive of the Minerals Council of South Africa.
All stakeholders have a responsibility to make it work, to make it produce, and to make it generate wealth and profits. Benefits can only be realised if mining companies are operational and profitable, and can benefits can only be funded out of profits. If you disrupt mining, you disrupt the profits.
If the mining sector thrives so too will other economic sectors, such as manufacturing and agriculture.
These are intertwined as they rely on the materials mined. The minister urged the sector to become obsessed with innovative thinking, create global South African companies and to make use of locally manufactured goods.
Mantashe said that it is not the size of the mine, but the size of the contribution the mine makes that matters, and appealed to the industry to look at its potential growth points, employment opportunities, and ensure positive promotion of the sector in the local and global community.
The Department of Mineral Resources has bought into developing and promoting the demand for platinum and urged the sector to look at the potential in marketing the hydrogen energy cell.
Confusion still abounds on the applicable BBBEE (Broad-Based Black Economic Empowerment) level for prospecting rights, while the Department of Mineral Resources has yet to finalise its decision.
Mantashe said he believes that while you are exploring you are not producing wealth — only when a mine is producing should the BBBEE target kick in.
How to attract investment in SA mining
Economists’ sentiments are that South African mining needs to get back to business. As a nation we cannot rely on global growth when we haven’t spoken about local economic structural problems, its composition and how it has changed over the years.
South Africa has moved from a tradable to a non-tradable economy, which is low in productivity and attracts higher skills, whereas the bulk of South Africa’s unemployed is in the tradable sector. We need to focus on growing this sector through mining, manufacture and agriculture.
“The problem is history — we keep changing things, and we need very clear commitment not only from the minister but from all those around him, and then we can present an investment case,” said economist Thabi Leoka.
“Our regulatory environment didn’t do us many favours in the last three years — but in the spirit of the new dawn we hope this gets better and reduces the risk between ourselves and global partners,” said economist Mike Schussler.
In the interim, mining companies will continue to do what they can around cost and price realisation, to generate cash and sustain the business. After they have generated cash to sustain themselves, then only can they look to shareholder dividends.