190204. Special Information Session, South Africa question and answer session with Minister of Mineral Resources, Gwede Mantashe and Minister of Trade and Industry, Doctor Rob Davies. The Investing in African Mining Indaba takes place at the Cape Town International Convention Centre. Picture: Courtney Africa/African News Agency(ANA)

CAPE TOWN – Mineral Resources Minister Gwede Mantashe yesterday announced bold targets to reclaim South Africa’s lost ground in mining exploration and contribution to gross domestic product as the industry charted a recovery following the fallout between business and the government.

Mantashe told the African Mining Indaba that the industry was back in business. He was citing the return of policy certainty underpinned by a commitment to addressing bottlenecks and corruption in the Department of Mineral Resources’ internal processes.

He said the finalisation of the Mining Charter and clarity on the Mineral and Petroleum Resources Development Amendment Bill signalled the commitment to policy certainty. 

“We can, therefore, say with confidence that South Africa provides a conducive environment for investment, and that we have a stable regulatory framework which provides security of tenure for investors,” said Mantashe.

He said the mining charter guidelines had been gazetted and the Mineral and Petroleum Resources Development Amendment Bill had been withdrawn to separate oil and gas from mining legislation, adding that a draft upstream Petroleum (oil and gas) Bill was in the process of being developed.

Mantashe’s upbeat tone was in stark contrast to frosty relations between his predecessor, Mosebenzi Zwane, and the industry.

The industry has also faced a downturn in the form of shedding thousands of jobs.

It has also fallen into higher input costs, such as electricity, with warnings that it would collapse if the National Energy Regulator of South Africa acceded to Eskom's request for a 15 percent-a-year electricity increase in each of the next three years.

Mantashe said the industry’s headcount stood at 457 000 people from 463 000, as the gold and platinum sectors shed jobs, despite manganese and coal mines employing more people.

President Cyril Ramaphosa is expected to address the indaba today, the first sitting head of state to do so, underpinning the importance the government had attached to the industry.

Roger Baxter, chief executive of Minerals Council South Africa, told journalists on the sidelines of the indaba that there were "green shoots" and renewals in 2019 compared to 2018, which was combative.

“There has been a stepping up of the consultation process with mutual respect and trust between industry and the department,” said Baxter.

Mantashe said the government was addressing corruption, particularly allegations of double granting of licences, improper allocation of Section 54 of the Mine Health and Safety Act and backlogs in the issuing of licences.

He said the exploration programme was led by the Council for Geosciences. It aimed to ensure the development of the industry into the future and comes as the industry grew by 1.2 percent in 2018.

“The mapping programme will bring South Africa in line with progressive exploration and mining jurisdictions and it is our intent to secure a minimum of 5 percent of global exploration budget within the next five years,” Mantashe said.

Mining expert Peter Leon, of Herbert Freehills, said Mantashe had made huge strides in stabilising the industry, despite being in the position for less than a year.

“Two things I commend him for doing; one of them was resolving the impasse in the Mining Charter 3 last September and, second, withdrawing the controversial Minerals and Petroleum Resources Development Amendment Bill, which was stuck in Parliament for five years. I think if that bill had been enacted, it would have done serious damage to the South African mining industry,” he said.  |  Additional reporting by Joseph Booysen

BUSINESS REPORT