JOHANNESBURG – (miningweekly.com) Mineral Resources Minister Advocate Ngoako Ramatlhodi remains confident that the resilience of South Africa’s mining industry will enable it to emerge from the current operating climate with minimal damage to the industry’s long-term sustainability.

During his budget vote speech for the 2015/16 financial year on Thursday, he noted that prices of the majority of commodities had remained “somewhat” depressed and, in certain cases, declined to levels that may threaten the sustainability of some South African operations.

Ramatlhodi further highlighted that the mining industry’s gross value added declined marginally year-on-year during the 2013/14 period by 1.5% to R227-billion, while total industry employment dropped to 493 000 from 508 000 in the same period.

Nonetheless, he enthused that, not withstanding the current challenges facing the local mining industry, the Department of Mineral Resources (DMR) had approved over 36 new mining rights in the past 12 months, which could create about 6 000 jobs.

However, to proactively tackle the plethora of challenges facing the industry, the DMR had strengthened the Mining Growth, Development and Employment Task Team (MIGDETT) and streamlined its technical working streams to optimise functionality and enhance efficiencies.

“The MIGDETT principals meeting, chaired by myself, provides strategic guidance on the work of MIGDETT. Stakeholders have accordingly established three work streams focusing on industry stability, transformation, growth, competitiveness and sustainable development,” said Ramatlhodi, who announced an increase in the DMR’s budget to R1.6-billion from the R1.4-billion it was allocated for the previous financial year.

FRAMEWORK AGREEMENT

The DMR would also continue to provide support to the implementation of the Framework Agreement for a Sustainable Mining Industry.

“We continue to call on stakeholders to respect and implement the framework agreement. Last year, we had to deal with the aftermath of the protracted platinum strike, arising from wage disputes. I am aware that wage negotiations are currently under way within the gold sector and urge stakeholders to draw lessons from experience and avoid a repeat scenario,” Ramatlhodi stressed.

LEGISLATIVE FRAMEWORK AND TRANSFORMATION

Ramatlhodi pointed out that the DMR’s interim assessment report on the implementation of the Mining Charter had been released recently.
“We have augmented capacity to collect data to gauge progress on implementation of transformation levers. For the first time, we deployed a Web-based system of individual right-holders to submit statistical returns online. The final report has been completed, barring the ownership element, and will be released following engagements with respective stakeholders,” he said.

Acknowledging the concerns raised by some stakeholders who harboured reservations on the matter of declaratory order, regarding ownership, Ramatlhodi stated: “These concerns relate to the broader transformation agenda of the sector. Consequently, I am engaging with the stakeholders to find a way forward regarding this matter, appreciating the need to have regulatory certainty.”

Further, the finalisation of the Mineral and Petroleum Resources Development Act Amendment Bill, which was referred back to Parliament last year, remained a priority and the DMR would be available to provide any support during its processing in Parliament.

Further, the Mine Health and Safety Amendment Bill, which was currently being processed through the National Economic Development and Labour Council would, upon approval by Cabinet, be referred to the National Assembly for consideration.

“I have also reprioritised the Bill on State-owned mining company [the African Exploration Mining and Finance Corporation] for referral to Cabinet and Parliament during the current financial year,” Ramatlhodi added.

The “urgent” development of a coal policy framework was also under way to ensure policy clarity on coal.

“A task team under the auspices of the MIGDETT has already started work [in this regard]. The key objective of this process is to develop a framework for ensuring security of coal supply for local consumption and the promotion of sustainable employment, among others,” Ramatlhodi stated.

Moreover, he highlighted that during his State of the Nation Address this year, President Jacob Zuma announced a Mining Phakisa, which would be convened to deliver fast and implementable results to the country’s development priorities.

“It is our intention to focus the Phakisa on, inter alia, mineral beneficiation to achieve a win-win situation, the development of a programme of action to mitigate binding constraints, including infrastructure and research and development, and channel the output of this stakeholder process as the basis to review the country’s mining strategy,” Ramatlhodi advised.

OIL AND GAS
In respect of shale gas development, the petroleum industry experienced an “unprecedented” drop in prices recently.

“We are optimistic that the situation will, over time, improve and will not necessarily impact negatively on South Africa’s exploration prospects. In this regard, I am confident that our augmented regulatory framework, which draws from global experience, will enables us to proceed swiftly.

“We will continue to use various platforms to engage stakeholders in dialogue on shale gas issues, as part of our consultative processes,” Ramatlhodi explained.