10 interventions SA's mining industry needs

Cape Town – In order to achieve a brighter future for the SA mining industry, research by the Boston Consulting Group (BCG) have found ten interventions that need to be implemented.

These are creating greater certainty and security for investors; providing the security of tenure investors need;

improving the approval process for mineral rights; 

encouraging access to risk capital and tax incentives;

updating and digitising SA’s outdated geological maps;

investing in upgrading the logistics infrastructure;

reducing utility costs; establishing sustainable wage negotiations;

improving technological competitiveness; and stimulating the demand for SA’s commodities.

Heinz Pley, a partner at BCG said during a panel discussion at Mining Indaba 2019 on Tuesday that benchmark research found that the SA mining industry did well in areas like board administration; the availability of a workforce and foreign interest in the industry.

On the other hand, the SA mining industry is not scoring so well in areas like the domestic and export market; the cost and reliability of energy and water supply; labour relations issues; and logistics.

Overall, in the view of Pley, there will likely not be massive growth in the SA commodities sector.

During the panel discussion Frans Baleni, a member of the advisory board of Mining Indaba and a former general secretary of the National Union of Mineworkers (NUM), said it is important to manage change or “change will mismanage you”.

“Nobody would want to continuously work in a very difficult, hard, strenuous situation in mines. We must not fear it and it must not be used as a ghost to scare that change will take jobs,” said Baleni.

 “I think it is high time that we reskill and reposition ourselves and prepare the pipeline right from high school level for people to be relevant.”

He said that his view is that any union worth its salt must think long-term or it will become irrelevant.

“You must motivate and propose alternatives to companies so we can move forward on a sustainable basis,” said Baleni.

“Also understand that issues of inequality will make it difficult for some people to accept salary proposals.”

Heidi Steinberg, sector specialist of Public Investment Corporation (PIC) said during the panel discussion that to have a healthy mining environment you need a healthy exploration sector.

“SA has lagged in exploration over the last 15 years due to policy uncertainty and other factors,” she said.

“We have also seen major mining houses pull out of SA one by one. They have gone to Canada, Australia and West Africa and with them went exploration due to a lack of incentives for exploration in SA.”

In her view, an exploration fund for junior miners should be established as well as legislation and an enabling environment for exploration.

Roger Baxter, CEO of Minerals Council of SA, was the last member of the panel and agreed that policy uncertainty played a big role in causing SA’s mining industry to currently be smaller in real gross domestic product terms than in 1994.

“There must be a clear vision of where we want to take the mining industry. You cannot start to build a building until you have a plan of what it must look like,” said Baxter.

In his view, it is also very important to focus on competitiveness, predictability, stability and infrastructure.

“Growth cannot happen unless there is real competitiveness,” said Baxter.

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