JOHANNESBURG (miningweekly.com) – A greater degree of certainty was emerging in the South African mining industry, Chamber of Mines (CoM) senior executive Roger Baxter said on Monday.
Talking to mining analysts and the media at a Harmony Gold-sponsored background briefing, Baxter said a “high road” was very possible for South Africa’s currently infrastructure- and labour-constrained mining sector.
He said that a positive stakeholder engagement process was under way on the draft Minerals and Petroleum Resources Development Act (MPRDA) Amendment Bill and that CoM looked forward to tax talks with a South African Treasury that had a strong track record of pragmatism on competitiveness drivers.
Calculating that mining made up a fifth of the South African economy by contributing R468-billion to gross domestic product and underpinning the employment of 1.3-million jobs, the CoM economist and strategist said mining had the potential to add another 200 000 direct jobs.
With adequate rail that was being laid on, iron-ore miners would be able to double production to more than 100-million tons a year by 2020, lifting employment by a potential 30 000 people.
With adequate rail and environmental regulations, coal production could rise to 355-million tons a year from the current 254-million tons a year by 2020, providing potential of another 100 000 jobs.
With cost-competitive heavy-haul rail, manganese production could be nearly trebled in the same period to 20-million tons a year from the current 7-million tons, providing potential of another 10 000 jobs.
Despite having 80% of the world’s high-grade manganese, South Africa supplied only 15% of demand.
Too much of the South African economy’s recent growth had been driven by credit-fuelled demand and tradable export sectors had languished.
“The only way that South Africa can reduce its high unemployment rate is through more balanced growth and the growth of key export sectors like mining.
“To ensure more balanced and higher levels of growth and job creation, South Africa needs its tradable export sectors to grow at a much faster rate,” Baxter said.
Among the threats to mining competitiveness were electricity and rail issues, policy uncertainty and rapidly rising costs, most of them out of the control of miners.
Mining company leadership throughout the CoM was “putting South Africa first” in resolving issues.
It was upping its game in areas where the industry lagged and was taking every opportunity to demonstrate the positive role that it played in the economy and society.
The industry was talking to the government on its potential contribution to the National Development Plan and engaging with the relevant people on improving competitiveness, labour market stability, community investment, environmental taxation and safety performance.