Department of Mineral Resources official welcoming address to the Mining Indaba Conference (2012) by Ms Susan Shabangu (MP), Minister of Mineral Resources, Republic of South Africa Cape Town International Conference Centre, Cape Town

7 Feb 2012

Programme Director: Mr Jonathan Moore
Organisers of the Mining Indaba
Honourable Ministers of Mineral Resources from other African countries
Members of the Diplomatic Corps
The investment community
Senior government officials
Delegates
Distinguished Guests
Ladies and gentlemen

Introduction

On behalf of the democratic Government of South Africa, I bid you the warmest of welcome to our country, and to this region of the Western Cape, in whose capital city we meet today amidst its splendour and beauty.

Even if mining has always been somewhat elusive in this region, may you have a chance to make interesting side trips, for instance, viewing where oceans converge, where wine farms abound, or where a world famous mountain with a flat top towers over a beautiful city.

It was Mark Twain, travelling the world more than a century ago, who called Table Mountain "a majestic pile" (Following the Equator, Dover Publications, USA, 1989, page 710). He described visiting the old Cape Parliament, "where they quarrelled in two languages and agreed in none". We now seek, as a democracy, to encompass no fewer than 11 official languages - and to agree in all of them, when it comes to the basic essentials of our national life.

You will know that this city has been gripped by a heat wave while many parts of the northern hemisphere shiver in snowdrifts, which has resulted in more than 300 people losing their lives. The icy weather has stretched from Rome to Sarajevo to Kiev, and beyond. Such are the vagaries of the weather these days - and, perhaps, of mining too!

These climatic extremes are living testimony to the impact of climate change. You will recall that we in South Africa recently successfully hosted COP17/CMP7 because we understood the gravity of the challenges facing us as we have to balance mining with sustainable development.

We are meeting here in the midst of the global economic crisis, and continued
vulnerability of the international financial system, especially in the OECD countries. This has translated into inevitable adverse and material effects on the productive sectors of the economy, such as manufacturing, agriculture and mining.

As we face global and domestic challenges, we are fortunate that we have no need to evoke Caesar's triumphant return to Rome across that famous river in north eastern Italy in 19BC. 

We have crossed it already, and we can seek to build now on the democratic success gained in 1990-1994 - without raising expectations through hyperbole or half promises. We are handling the critical interests of the nation with circumspection and clarity, as delegates will see. This year's Indaba is significant in that it is taking place against the backdrop of the centenary celebrations of the oldest liberation movement on the African continent - the African National Congress. This year is also the tenth anniversary of the promulgation of the MPRDA, our ground breaking legislation that fundamentally changed the face of the economy of our country by emphasising transformation and socio-economic development.

In the midst of this debate about nationalisation, we have consistently maintained that nationalisation is not the policy either of the ANC or the government of South Africa and that, when all is said and done, the ANC will adopt a policy position on this issue that is in the best interests of South Africa. Furthermore we have consistently maintained that, were it not for the mining industry lagging behind in terms of implementing the provisions of the Mining Charter and the MPRDA, through, among other things, instances of fronting, this debate would not have been there in the first place.

I welcome the fact that the report of the ANC's Task Team on nationalisation has reinforced the ANC's earlier decisions that nationalisation is not a viable policy for South Africa. This is not a surprise. It demonstrates the consistent but pragmatic policy that has guided the ANC over many decades including the period of the adoption of the Freedom Charter in 1955 and, even more recently, the period after 1994.

SAMRAD

Last year, I announced the launch of South Africa's mining cadastral system, the purpose of which was to introduce transparency and reduce the administrative burden on potential investors. The online South African Mineral Resources Administration System, known as (SAMRAD), was accordingly launched on 18 April 2011 and applications for rights can now be made remotely through the Department's website. 

While there were initial teething problems with the submission of applications, these were addressed as and where they were identified. With well over 3000 application now successfully lodged, the rate of applications is very much in line with the annual rate of applications since the implementation of the MPRDA. This also indicates continued and sustained interest in the South African mining industry.

Rules of the port

Last year, at the time of this Indaba, there was still a moratorium on prospecting rights, which we have since lifted. When I lifted the moratorium, I announced the intention to implement a new process that would be applicable to prospecting and mining rights that have either lapsed or been revoked. 

Only yesterday I placed a notice in the Government Gazette inviting proposals or comments with regard to our intention to pursue this route. In so doing we seek to ensure that there is investment in our mining jurisdiction beyond the current unacceptably varied levels of investments, and this we will do in a manner that obviates the prospect of the hoarding of rights. To this end, the mining industry is accordingly invited to submit representations, over the next 20 days, to my Department.

Beneficiation

Programme Director, 

Beneficiation of South Africa's minerals is a critical component of the industrial and economic development framework. It is the vehicle through which South Africa's resource based comparative advantage can be transformed into a national competitive advantage. To this end, a beneficiation strategy has been developed to maximise the returns from the exploitation of our mineral resources.

The beneficiation policy identifies five pilot mineral value chains: iron ore and steel, energy, autocatalytic converters and diesel particulates, titanium, and the jewellery value chain. The first two of these are complete, and we are in the process of finishing the final three.

It is not our intention to force mining companies into being manufacturers, but rather to address the challenge of the inaccessibility of our raw materials as an impediment to greater local beneficiation. I am delighted with the initiative shown by some mining companies to support the aims of the strategy. This work demonstrates their commitment to South Africa.

SOMCO

In pursuance of the objectives of the developmental state, we have, as stated here last year, established the Cabinet approved state-owned mining company (SOMCO) to support state participation in the mining industry. To this end, I have issued a government gazette effectively levelling the playing field and ensuring that SOMCO is regulated by the same set of rules as the private sector.

MIGDETT

In January of this year, government proactively convened stakeholders in the industry to assess the situation and deliberate on emerging challenges. These discussions were held under the umbrella of the Mining Industry Growth and Development Task Team or MIGDETT which I spoke about last year. This is being done in keeping with our rich history of social dialogue and tripartite engagement. I look forward to tangible results from the work of that tripartite team.

In 2011, I reported to this gathering that the MIGDETT process has identified crosscutting constraints to the growth and development of the industry which include infrastructure, skills, as well as Research and Development. The recently released Transnet infrastructure development plans are an example of government's response to address those constraints. The other MIDGETT task teams will continue with their work to ensure that the industry is able to grow, create jobs, grow the sector, and remain competitive.

MPRDA review

Last year, I intimated to this forum that we are embarking on a process of reviewing the Mineral and Petroleum Resources Development Act (MPRDA) with a view to creating clarity where there are ambiguities. It so happened that whilst we were doing that, there were a number of court cases, the outcomes of which will be considered in reviewing the Act - though some of these cases were only finalised towards the end of last year. It would have been imprudent for us to have concluded this work in disregard of those processes.

Environmental management and sustainability

Ladies and Gentleman,

The goal of ensuring that mining takes place in a responsible manner cannot be met while the environmental impact resulting from mining activities is not properly regulated andmanaged. We also recognise that there could be challenges facing potential investors in respect of acquiring the necessary approvals. 

It is against this background that last year I informed you of efforts to align the licensing framework for permits which affect more than one department. I am pleased to inform you that over the past year there has been significant progress; and this process is at an advanced stage. We will consult on this matter and explore the potential for strengthening and creating an enabling regulatory framework

Mine health and safety

Health and safety in the mining industry is central. As government, we will continue to use the Mine Health and Safety Act and related legislation to take appropriate action to ensure that workers have a safe and dignified work environment; that their right to sanctity of life is protected; and that they are able daily to return to their loved ones.

In this regard, the Department has worked hard to step up the monitoring and evaluation of compliance. Where necessary Section 54 of the Act has been invoked to halt or suspend operations of mines or sections of mines found either to be unsafe, or not compliant with the law. These measures and concerted stakeholder engagements have contributed to a significant and consistent drop in the number of fatalities reported by the mining sector.

The latest figures show that fatalities in the mining industry have dropped by 3% - from 127 in 2010 to 123 in 2011. We remain gravely concerned about the continued loss of lives at the mines. Already this year, there have been 13 fatalities in the mining sector. The recent spates of fatalities are also a reflection of some CEOs refusal to make meaningful changes and take personal responsibility for health and safety issues. Some of them value profits more than the lives of the people.

Also, the Department has been greatly concerned about the lack of improvement in compliance and fatalities in the major platinum mines. The platinum sector alone contributes about 30% of all fatalities which remains a serious concern. It is therefore to be expected that the Department will monitor these mines through intensified inspections and group audits.

While Section 54 has had the desired results in terms of improving safety in our mines, concerns have been voiced by the industry regarding its implementation. Government and

its social partners under the auspices of MIGDETT have established a task team to investigate the industry's concerns. It has to be emphasized that it is not the mandate of this task team to review the principle of implementing Section 54 but rather to afford industry an opportunity to raise their concerns with regard to the application of the provisions of the law.

As part of a concerted effort to improve the health and safety of employees on the mines, a Mine Health and Safety Summit was held in November last year. The Summit brought government and its social partners together to review the state of health and safety in the mining sector. One of the key concerns raised at the Summit was the lack of visible improvement on health matters. 

Commitments that flowed from that process include: the implementation of a culture transformation framework; the establishment of a Centre of Excellence to undertake research, training and capacity-building for implementation of best practice; the long term implementation of TB and HIV/AIDS programmes, as well as significantly to improve the quality of living conditions of mine workers.

The future of the industry will also depend on how we can adopt appropriate best practice in mine health and safety and invest in the necessary technologies. In this regard the Mine Health and Safety Council will be focusing on the promotion of best practice, research and technology transfer.

Africa

Ladies and Gentlemen,

We are part of the African continent and it is very much in our interest to contribute to realising the "Africa Mining Vision", which strives, among other things, to:

• develop a knowledge-driven African mining sector and market;
• diversify the industry through beneficiation and the building of value chain linkages;and
• address socio-economic needs of the continent.

This gathering has the potential to trigger a quantum leap forward in respect of developing the African minerals and mining industry.

Concluding remarks

Distinguished Guests, 
I would like to conclude by once again welcoming you to our beautiful country. Working together we can indeed do more, and the Mining Indaba is the right address for us to do just that. I wish you well in your deliberations.

I thank you.

Issued by the Department of Mineral Resources, February 7 2012

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