CAPE TOWN (miningweekly.com) – With more gold in the ground than has been mined in the last 100 years, the South African gold mining industry has a great opportunity to modernise, introduce a social and economic compact, loudly condemn the errant behaviour of the past and eliminate the trust deficit, Chamber of Mines VP and Sibanye-Stillwater CEO Neal Froneman said on Monday.
Speaking on day one of the Mining Indaba at a function to mark the thirtieth anniversary of the World Gold Council, Froneman warned that if the gold-mining industry did things in the same way that it had in the past, it faced the prospect of dying in a relatively short space of time.
“I’ve spent most of my career in gold and it’s never lost its magic for me. I’m still very much a gold bull,” said Froneman, who described as “quite staggering” the gold resources still available to be mined in South Africa.
“Yes, it’s deeper and it’s lower grade, but there’s still a lot it and this does not have to be a sunset industry. But if we do things in the same way as we have in the past, it’s not going to work,” he said, adding that much-needed market development of platinum could learn a lot from what had been achieved in gold, with the Krugerrand a key example of that.
“I certainly see a lot of similarity between the two,” Froneman stated at the Mining Indaba event attended by Creamer Media’s Mining Weekly Online.
Firstly, the industry needed to modernise, which in the South African context meant optimally extracting and beneficiating the country’s natural resources, while causing no harm to people and planet.
He said that modernisation benefits both the local community and the national economy by procuring locally, becoming a preferred employer of well-skilled people and creating appropriate risk-adjusted returns for investors. Regulations, taxation and incentives were rendered consistent and transparent and mining would become a long-term driver of growth.
The social and economic compact, which was a concept tabled during gold industry wage negotiations in 2015, emphasises the importance of having a job that provides income, medical aid, housing and exposure to upliftment and transformation.
To retain jobs, companies need to make a profit to preserve sustainability and the failure to implement the social and economic compact has resulted in a large number of job losses.
“There’s a huge responsibility on labour and business to make the economic and social returns in ways that minimise conflict and promote confidence among all stakeholders. We’ve moved away from adversarial and positional bargaining,” he said of the chamber’s wage negotiating strategy.
To eliminate the trust deficit, he is keen on implementing the Zambezi Protocol, which was developed on the banks of the Zambezi River and involved long-term thinkers who understand Africa and how the trust deficits have arisen.
Restoration of trust fosters constructive partnerships and should result in far more harmonious investor friendly relationships.
There was a need, he said, for the industry to commit to never repeating the wrongs of past.
“We have not had the correct environment in South Africa to actually launch that initiative. I would argue that with very recent changes that have happened that we’re starting to see the right environment to launch that initiative.
“Finally, unless we have ethical government and a Ministry that supports mining, we’re also not going to move forward,” he said, expressing confidence that the different government leadership was poised to result in a different South African mining industry in the not too distant future.
“I remain extremely optimistic at this stage. We as the collective custodians of the South African mining industry in business, government and labour have to choose and choose quickly on whether they want to see the South African gold industry thriving for another 50 years or are we content to allow it to peter out and die.
“I would suggest that we have already embarked on a very different road and if you wanted to hear what we’re doing different and what’s going to be different in the future, I think some of the four issues I’ve alluded to give you an idea of what’s going to be different,” Froneman stated.