South African mining industry is open for business

9 Mar 2011

"The South African mining industry is open for business". This is the message that the mining industry has been articulating to the investor community in Toronto, Canada, during the annual Prospectors and Developers Association of Canada Convention (PDAC). The South African mining industry's international road show started on 6 March 2011 in Toronto, from where it will continue to New York and Boston in the United States.

Led by the Minister of Mineral Resources, Ms Susan Shabangu, the delegation is comprised of business and labour representatives of the Mining Industry Growth and Development Task Team (MIGDETT). These include the President of the Chamber of Mines Dr Xolani Mkhwanazi, Mr Senzeni Zokwana, the president of the National Union of Mineworkers (NUM) and Mr Aubrey Lekwane, who is the CEO of the South African Mining Development Association (SAMDA).

The road show takes place amidst the release of a report by the Fraser Institute - a report surveying global mining - which ranked South Africa 67 out of 79 mining jurisdictions around the world. In response to some investors voicing concern over this low ranking of the South African mining industry, the minister indicated that she was not perturbed by this as the Mining, Industry Growth and Development Task Team (MIGDETT) process has identified a number of the of the weak points and were already being addressed by the MIGDETT strategy.

As an example she cited the fact that the regulatory framework- especially the ambiguities in the mining law - were being addressed. She further commended the contribution of MIGDETT to the amendments of the Mineral and Petroleum Resources Development Act (MPRDA), which will shortly be tabled before Cabinet.

These include:

• strengthening the construct of legislation to remove identified weaknesses such as ambiguities in some of the provisions
• clarifying the consultation process precedent to submission and processing of right application
• streamlining the licensing processes to a virtual "one-stop-shop" for all mining requirements, including environment and water use licensing
• strengthening provisions that sanction non-compliance appropriately
• Strengthening provisions to improve working conditions (mine health and safety) and our performance in this regard.

Minister Shabangu also pointed out that the bulk of the proposed mitigations are already linked to existing plans of government, such as infrastructure constraints in terms of electricity supply, rail and ports. For instance, government recently released a revised macro-economic policy framework known as "The New Growth Path", which prioritises the mining industry value chain as one of the growth nodes of the country's economy. She made reference to the fact that the mining sector in South Africa is now among the top four priorities that will help government create more jobs, where it was previously considered a sunset sector.

Dr Xolani Mkhwanazi, the President of the Chamber of Mines, said the delegation was pleased with the interest displayed by the investor community in Canada. He also commended the leadership displayed by Minister Shabangu in the process and said that he was positive that the industry will soon flourish again.

"This renewed process of working together between the different stakeholdersbodes well for the mining industry, and I would like to praise the industry for being proactive in dealing with the various challenges it faces and therefore contributing to the national imperative of creating more jobs," he said.

Minister Shabangu the delegation leave Toronto today for the second leg of the road show and will be addressing investors in New York on the 10 to 11 March and move on to Boston on 14 March.

Issued by Musa Zondi, Department of Mineral Resources, March 9 2011

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