The transformation of the economy is aimed at addressing the evil triplets of inequality, poverty and unemployment. When the Mining Indaba met last year, there was a debate on nationalisation.
At the time, I gave the assurance that nationalisation was neither the policy of the ANC, nor that of the government. The ANC’s elective conference in December has also reconfirmed that: nationalisation is not an option for our country.
This past week at the Mining Indaba I’ve appealed to the leadership in the mining industry not to try to resuscitate this debate in different forms and guises, which may invariably be marred by different interpretations.
I have affirmed that the government is fully conscious of the reality that mineral development cannot happen unless capital is invested by the private sector.
There is room for private and public returns – indeed these are interdependent.
Hiving the state-owned mining company, African Exploration Mining and Finance Corporation, off from the Central Energy Fund should be completed during the first half of this year. We are also strengthening the company by consolidating identified state mining assets into it. The ancient Greek sage Aristotle said: “The whole is greater than the sum of its parts.”
This year also marks 100 years since the enactment of the Native Land Act that created a system of land tenure that deprived most South Africans of the right to own land, and eventually compelled Africans who had lost their land to join the mining industry as migrant labourers.
The remnants of this migrant labour system, poor housing and living conditions, high levels of illiteracy, and low skills inevitably contributed to Marikana. To deal with this urgent matter, the government has appointed a commission of inquiry headed by Judge Ian Farlam. At the same time the government is responding to the broader socio-economic challenges through measures announced by President Jacob Zuma that address housing and living conditions of mineworkers.
To achieve a lasting solution to these challenges the point of departure should be the need to address the underpinning structural and historical elements and not just the symptoms. This requires mining stakeholders to work in partnerships to obviate any prospects of last year’s events repeating themselves. The country and the industry cannot afford another Marikana.
As Nobel Laureate Amartya Sen puts it: “Poverty is not (only) a condition of low income and lack of assets. It is a condition of vulnerability, exclusion and powerlessness. It is the erosion of the people’s capability to be free from fear and hunger and have their voice heard.”
For this reason the government’s transformation agenda is seeking to redress past imbalances in a quest to build a normal and inclusive society.
The landmark mining regulatory reform introduced in 2004 brought the industry in line with the international norm that recognises natural resources, including minerals, as a common heritage of the people. This reform represented a “social pact of a special type” among mining stakeholders – government, business and organised labour.
As part of this, stakeholders committed themselves to a transformation window with targets to be achieved within a timeframe of 10 years ending next year. Yet transformation is a process and not an event. Therefore it must not end in 2014.
It is an intrinsic component of our industry and should be considered a business imperative, as opposed to being reduced to a compliance issue.
Notwithstanding remarkable progress on the socio-economic front, deep structural challenges still run deep and linger very much on the horizon.
As a result, the government embarked on a process to review the mining legislative framework. Proposals have been gazetted in December for further comment to amend the Mineral and Petroleum Resources Development Bill.
The bill will be submitted to Parliament for further engagement and consultation with the public. Stakeholders and interested parties should make their submissions both formal and informal.
The focus of the amendments is to, among others, remove ambiguities in the act that created room for a multiplicity of interpretations – to ensure that the act remains relevant; to strengthen administrative processes and to provide for enhanced sanctions for non-compliance.
The intention is also to introduce provision for the minister to determine the period during which applications can be lodged; to strengthen provisions relating to cession; to effect transfer and partitioning of rights, and to introduce a provision to promote the beneficiation of our minerals.
Evaluating the negative effect of a fragmented approach, a process has been initiated towards an integrated mining licensing approach in government, in conjunction with the minister of water and environmental affairs. Officials are already at an advanced stage of finalising modalities aimed at enhancing turn-around time and the quality of licensing.
This process also forms part of the amendments to the Mineral and Petroleum Resources Development Act and other relevant legislation.
The new process is expected to herald a significant improvement in service delivery in terms of certainty regarding security of tenure when mining or prospecting rights are issued.
We acknowledge the short-term challenges facing the mining industry broadly and the Platinum Group Metals sector specifically, compounded by challenging global economic growth prospects.
We are seized with these challenges through our tripartite structure, Mining Industry Growth, Development and Employment Task Team. I am confident that the collaborative work of stakeholders will yield desired outcomes yet again.
Through this forum, we are also working diligently with Anglo American Platinum, the Department of Labour and organised labour partners to engage constructively to find enduring solutions.
These will find expression in platinum sector-wide solutions, consistent with the principles of the Platinum Task Team I had set up in June last year.
Several credible platinum analysts’ outlook on platinum in the medium to long term coalesce into a significant upside prospect for the sector.
The resurgence of one of the companies that experienced the largest labour tensions and reached the lowest ebb in production has led to a progressive business model. It recognises the importance of all stakeholders inclusively, and corroborates the positive signs of recovery on the horizon.
This is characteristic and reminiscent of the theme of the recent World Economic Forum aptly titled “dynamic resilience”, which is a common feature of the mining industry’s tripartisan establishment.
This forum also recognised the promising position of South Africa and the African region, poised to be the emerging force driving global economic growth.
I encourage those mining companies that have worked to transform and grow the sector, thereby contributing towards national development, and appeal to those who have not progressed as well to accelerate their efforts towards achieving meaningful transformation.
Ours is a nation with a young population and work force – the envy of many others. For us to leverage the population dividend for the growth of the economy and the mining industry specifically, we need to work collectively to design responsive skills development interventions.
The government will work with our social partners and all relevant institutions such as the Mining Qualifications Authority and the Department of Higher Education and Training to ensure we plan for future training needs of the industry.
I am encouraged by the substantial increase in enrolment of young women and men in engineering qualifications, with female enrolment doubling since 1996. This suggests the base skill requirements for the sustainability of the industry are being built, but these skills must be nurtured and protected. The industry should focus on skills development and research as part of its long-term strategic vision.
l Shabangu is Mineral Resources Minister. This article is based on her address to the Mining Indaba in Cape Town.