The local mining industry is “almost dormant” and it is having a knock-on effect on consulting engineers, leaving them with little in the way of projects, says voluntary association Consulting Engineers South Africa CEO Chris Campbell.
Many consulting engineers servicing the mining industry are active across other infrastructure sectors and across the borders of the country to stay in business, he notes. “It is the general approach because the low levels of investment in infrastructure are stretching across sectors.” Many of the companies are also having to downsize, he adds.
The mining industry is awaiting the outcome of the third iteration of the Mining Charter and, owing to that, the general mining-related infrastructure investment market – with mining being one of the key industries – “seems to be rather quiet”, he adds.
Campbell believes that the current state of the industry has mostly been brought on by the “debacle” surrounding the Mining Charter. “It would appear that the only way a state of certainty – which investors require – will be reached is to produce a Mining Charter in the most balanced fashion, one that meets transformation requirements, expectations on the part of government and encourages appetite for investment.”
Since its publication in June, the charter has led to disagreement and a lack of trust among key industry stakeholders, while an interdict application to suspend the implementation of the charter and a review application to set the charter aside have been lodged. Mineral Resources Minister Gwede Mantashe said in February that the charter would be finalised in three months.
Earlier this month, the North Gauteng High Court ruled in favour of the ‘once empowered, always empowered’ principle, which means that mining right holders will be able to retain their empowerment status even if their empowerment partners dispose of their stake in the firm. However, Mantashe said that the Department of Mineral Resources would engage further with the mining industry about the ruling.
Campbell comments that a negotiation process, possibly driven by mediators if need be, may encourage objective solutions that find middle ground for the sake of a balanced Mining Charter.
Campbell emphasises that the mining industry is an essential contributor and driver of the South African economy.
“The growth of our economy has, in the past, been largely premised on a healthy mining industry, not only in the obvious sense of the traditional pit-to-port mining that exists, but also where there are opportunities that have not been leveraged adequately.”
These opportunities relate to beneficiation, he explains. “Beneficiation has a direct impact on encouraging the development of local industries. The manufacturing sector is key to driving our economy, and the country needs to distance itself from what other countries have termed ‘the resource curse’.”
This refers to the contradictory situation in which countries with an abundance of natural resources experience stagnant economic growth and worse development outcomes than countries with fewer natural resources.
Campbell explains that, in many cases, South Africa mines the minerals, sends it off to other countries and then buys it back in the form of semi-finished or finished goods; this process results in limited economic benefit for the country.
“South Africa has the capabilities and expertise to grow a vibrant local manufacturing industry, which will promote sustainable job creation. To simply drive ownership of mines limits the benefits to the broader South African community.”
He stresses that the country needs to be progressive and use processes, such as the review of the Mining Charter, to explore how opportunities for local beneficiation could be maximised. Beneficiation could expand into many other areas that do not necessarily directly service mines, but feed a broader industry, he adds.
“I believe that the country has many entrepreneurs and innovators who could work together with academics to support and conduct more research that could feed back into ways that some minerals could be used more effectively and efficiently,” he concludes.