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Charter a stepping stone towards mining industry recovery, but tech adoption needed

MCSA chairperson Mxolisi Mgojo

Photo by Dylan Slater

Deshnee Naidoo, Ian Cockerill and Sipho Nkosi

Photo by Dylan Slater

3rd October 2018

By: Marleny Arnoldi

Deputy Editor Online

     

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JOHANNESBURG (miningweekly.com) – Exxaro Resources CEO and Minerals Council South Africa (MCSA) president Mxolisi Mgojo said 2018 was a second watershed moment for South Africa’s mining industry, following the finalisation of Mining Charter 3.

The first moment of this magnitude, he noted, was in 2004, when the Minerals and Petroleum Resources Development Act was promulgated and when the first Mining Charter was gazetted.

Mgojo believes “we have landed on something we can lean on,” even though there was hostility in the discussions leading up to the finalisation of the charter.

“The Mining Charter is the industry’s most important transformation tool. It is delicate and a complicated instrument. There is a need for a balance between legacy industry growth and impact, and a meaningful contribution to the economy.

“The mining industry is still a long way from achieving the vision that was articulated in the first charter – being an industry that reflects a transformed South Africa.”

Mgojo said the MCSA is still studying the contents of the charter, so as to not have a kneejerk reaction, but rather provide constructive input.

“The council understands that no negotiation can end with all parties satisfied with all aspects of the final product. There are still concerns around economic consequences that will ensue,” he noted, adding that implementation guidelines remain crucial for the effectiveness of the charter and for the industry in general.

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During a panel discussion on the charter, Vedanta Zinc International CEO Deshnee Naidoo said the mining industry still needs a shared vision to be created, especially to regain lost ground that has slipped in the last decade.

“We need to catch up on technology to become more competitive with global mining companies.”

BlackRock World Mining Trust nonexecutive chairperson Ian Cockerill said he had observed, over the last decade, that South Africa has shown itself to be truly world class in mining, but stepped back at the eleventh hour.

“The initiatives on the current Mining Charter are a positive step in the right direction; however, the devil is in the details.”

He added that, if the industry is to remain hostage to its past, it will never be able to craft a future. “A clear roadmap needs to be set out of what the charter wants achieved as an industry, otherwise all its progress would have been in vain.”

Talent10 nonexecutive chairperson Sipho Nkosi, meanwhile, pointed out that, over the last decade, having so many Mineral Resources Ministers had been challenging.

“Government leaders need to be on one level. The mining industry has spent more than R300-billion over the last ten years to create new entities, but it is shocking that the [investment] has disappeared.”

The panel was asked why the industry has been slow to adopt new technology, to which Naidoo said there has been a fear of losing jobs. “However, if you embrace technology, you can grow the industry to have more jobs on a net effect, but that has not been in discussions enough. If not for the labour concern, we could become a quick adopter.”

Cockerill added that the nature of the orebodies in South Africa – predominantly gold and platinum orebodies – is not conducive to new technology as bulk commodities, since gold and platinum are often found in narrow stopes, which are not automation and mechanisation friendly.

However, he said there was much that could be done in terms of adopting technology for improved mine planning and process flows. “We have not adopted technology that could improve the working environment and productivity.”

Nkosi said South Africa had, for a long time, been dependent on cheap labour and, therefore, there was not a need to look at these technologies, since someone was already doing the job at a cheaper payment rate than what the technology would have cost.

However, he pointed out that the industry needs to have discussions around increased competitiveness and productivity, which requires technology adoption.

Cockerill argued that labour may seem cheap, but looking at how significant labour contributes to operating cost, it is not cheap, because productivity levels are still low for the amount of workers employed.

Naidoo pointed out that many historic deposits had been left behind, owing to safety risk or lower grades but that automation and other technology now allows for safer mining and increased recovery, for which the industry needs to adopt a revised operating model.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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