Official opening address by the Minister of Minerals Resources, Adv Ngoako Ramatlhodi at the annual Investing in African Mining Indaba

10 Feb 2015

Program Director,
Organisers of the Mining Indaba 2015, Jonathan Moore
Honoured Speakers,
Ministers and Deputy Ministers ,
Minister of Small Business, Ms Lindiwe Zulu
Excellences' and Ambassadors,
Leadership of organised labour,
Captains of industry,
Special welcome to the junior miners and SMME's

It is my singular honour and privilege, to welcome all delegates to South Africa and to the city of Cape Town. A warm and hearty welcome to you excellencies, distinguished guests, ladies and gentlemen.

We gather at a time when, according to the recently released Oxfam report, the gap between the rich and the poor has grown to alarming proportions, where the world 1% owns 48% of the world's total wealth as against the 99% impoverished majority with increasing unemployment amongst the youth.

We are also witnessing difficult times for the broader mining industry characterised by plummeting commodity prices, perhaps unprecedented in some respects, where the price of several minerals has conspired to collapse at the same time. This gloomy environment is bound to colour deliberations of the Cape Indaba 2015.

The wealth gap is not only domestic in individual countries; but also between the developed and developing countries, in particular the African continent despite being the home to some of the largest reserves of extractable minerals. For instance, between themselves South Africa and Zimbabwe produce 80% of the world platinum.

The continent is the least beneficiary of the mineral wealth generated from its bowels. In order to remedy this situation, the AU head of states and government summit, has adopted the Mining Vision for Africa a few years ago, which emphasises the dire need to benefit producing countries and host communities, where extraction is taking place.

Following the adoption of the Vision, African Ministers of minerals were mandated, to establish institutional instruments which would give life to this vision. We are hard at work to discharge this mandate without further delay.

Programme Director,

May I take this opportunity to reiterate the message that South Africa is ready for investments. In the past 20 years, we have build a stable constitutional democracy underpinned by the rule of law and a justiciable bill of rights. This is further reinforced by a strong monetary and fiscal regime and an independent Reserve Bank, which have assisted us to navigate rapid and sometimes difficult changes in the global economy.

However, the big blight on this good story is high levels of unemployment and inequalities, accentuated by legacies of our painful past, where the majority was excluded from any effective participation in the economy and political life of the country. In order to resolve these challenges, we have adopted the National Development Plan, which is a road- map towards a future of plenty for all.

Given the centrality of mining to the economy of the country, we are leaving no stone unturned, in providing a stable environment for the industry to grow. In this regard, we have established a forum where the ministry, the industry and labour are engaged in on-going conversations to resolve challenges, presenting from time to time. This forum is known as the Mining, Growth, Development and Employment Task Team (MIGDETT). Amongst others, the forum discusses meaningful economic participation for employees and communities, Human Resource development, Health and safety.

I am fully apprised of the restructuring plans of some of the major players in the industry. Rather than burry our heads in sand, we have decided to take advantage of the new situation and turn adversity into advantage. In this regard, I am satisfied with the conversations taking place between us and the industry. Our intention is to establish a new South African mineral based National Champion.

This champion will be community based with a strong worker participation and anchored and run along business principles, shepherd by a leadership that is prepared to stay in for a very long time. That leadership should not leave the flock in the veld and run for greener pastures. This then, constitutes the fundamental characteristics of the champion we seek to build, be it a single commodity creature or a multi commodity enterprise. It could also mutate carrying with it small producers. The Underlying principle is broadbased and broadbased.

Ladies and gentlemen, currently, we are reviewing progress made in the attainment of objectives set out in the Mining Charter, which is a legal instrument enabling transformation in the industry. A tripartite team has adopted the template which should enable us to release the results of the review by the end of March 2015. We have also set up a special processing team in the department dedicated to process data, which is populating the template. In case we have forgotten, objectives of the MPRDA of 2002 were the following:

Promote equitable access to the nation's minerals to all people of South Africa

Substantially and meaningfully expand opportunities for Historically Disadvantaged Persons, including, women, to enter the mineral and petroleum resources;

Promote Economic growth and mineral and petroleum resources development; and lastly

Promote employment and advance the social and economic welfare for all South Africans.

These are the principles that continue to guide us to meaningfully transform the industry, and indeed, the face of the South African economy.

Again, I wish to emphasise my intention to provide regulatory certainty in order to assure those who have invested here and those still considering to do so. Accordingly, I have welcomed our President's decision to refer the Minerals and Resources Amendment Act back to Parliament so as to ensure that it meets constitutional muster. This referral provides the opportunity to separate the oil and gas part of the Bill from the part dealing with traditional minerals.

Secondly, we hope to close the debate around the developmental price, as indicated earlier. I want to open the boil now so that there is no come back on policy issues, in the foreseeable future. In the current draft, the developmental price is set at the mine gate price and this is being contested vigorously. I want us to bring finality to this issue one way or the other, guided by the policies of government, interaction with the industry and legality.

Last year the Departments of Mineral Resources, Environmental Affairs and Water Affairs, announced the introduction of an integrated one stop licencing regime, operational as of 8 December 2014. The environmental system as it is known is aimed at streamlining licencing processes of various authorities. It represents Government's commitment to improving the ease of making business in South Africa. Authorisations in respect of mining, environment and water use will now be issued simultaneously within 300 days.

In case a decision is appealed, an additional 90 days will be granted to finalise the process. Under the system, the Minister of Mineral Resources is responsible for issuing environmental authorisations and waste management licences of mining activities, whilst the Minister of Environmental Affairs is the appeal authority. 

In recent times, South Africa has experienced power challenges. It is our collective responsibilities to resolve these challenges which, at the same time present opportunities for collaboration between mining houses, between mining houses and communities and between mining houses and the government. This will be the actualisation of a win- win situation born of shared values amongst role players joined together at the hip by a moment in time and a shared destiny.

Government understand the importance of infrastructure in the development of the economy. We thus committed more than one trillion rand in infrastructure development. We are paying particular attention to energy, as we acknowledge the reality that there is no mining without energy.

Accordingly, collectively supporting Eskom to attain a long term sustainable financial solution ,  we are allowing renewables to come on line, deploying solar power, finalising regulations for private coal power stations and signing up with possible partners in the development of nuclear energy. However, our crowning glory is the Great Inga project, where South Africa has signed an off take contract for 2500 mw annually by 2023.

We are looking forward to a festival of ideas which should help the world economy to claw back to the summit of our aspirations.

Welcome to South Africa, once again. 

I thank you.

Issued by the Department of Mineral Affairs, February 10 2015

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