PRETORIA (miningweekly.com) – Finance Minister Pravin Gordhan is establishing a venture capital incentive for junior mining companies to strengthen growth in the South African mining sector.

The fund would, through the Industrial Development Corporation, make R24.6-million a year available to emerging and developing mining companies in an effort to promote small businesses in mining.

This formed part of government’s broad support to the business sector to grow the South African economy, increase the rate of job creation and reduce poverty. It also supported government’s examinations of wider interventions to lower the cost of doing business.

President Jacob Zuma recently promised to keep the country’s mining sector “globally competitive”, pledging to upgrade rail and ports to increase the shipping of commodities.

Gordhan, who unveiled South Africa’s 2012 Budget in Parliament on Wednesday, said large-scale investments in public infrastructure, together with private investment, would expand production and export capacity for coal, platinum, palladium, chrome and other minerals from regions such as Limpopo.

Freight logistics group Transnet was planning to invest R300-billion over the next seven years, with a focus on the freight rail network, large capacity upgrades on the iron-ore and coal export lines, acquiring modern rolling stock and refurbishing existing infrastructure.

The Saldanha Port’s handling capacity would be expanded to accommodate increased iron-ore throughput, while investments in the Richards Bay port would increase bulk export and cargo capacity.

The Minister pointed out that, as a major mining economy, South Africa should be benefiting more from the continued buoyancy in commodity markets internationally. However, while the country has sustained growth on the back of high commodity prices, industrial action and safety-related stoppages disrupted production.

To this end, R154.5-million was allocated to the promotion of mine safety and health. This included occupational health and safety (OHS) inspections and mine audits and implementing OHS strategies and enforcement guidelines to reduce injuries, fatalities and dangerous incidents by 20% a year.

Further, the government has allocated R595.6-million to mineral policy and promotion to encourage investment in the mining sector, as well as green and sustainable mining.

Meanwhile, as part of government’s economic and support package, which promoted rapid recovery and job creation, R350-million was allocated to the Council for Geoscience for laboratory equipment and facilities upgrading, as well as to the Council for Mineral Technology.

Government also put aside R433-million for short-term interventions to tackle acid mine drainage and has allocated R139-million to the rehabilitation of 37 ownerless and derelict mines.
 

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