JOHANNESBURG (miningweekly.com) – Turning around the fortunes of South Africa's mining industry will require greater collaboration between industry stakeholders, Department of Trade and Industry (DTI) director Yusuf Timol said on Tuesday.
Speaking at a presentation hosted by the Mining Equipment Manufacturers of South Africa on the sidelines of this year’s Electra Mining Africa conference and exhibition, in Johannesburg, Timol lamented the contraction in South Africa's economy.
A significant contributor to the contraction of the economy, he pointed out, is the trade balance.
Machinery and commodities were the main contributors to the negative movements in the country's trade balance in recent quarters.
These contractions, Timol further highlighted, provide an idea of how serious and difficult the current trading environment is.
He, therefore, urged industry stakeholders to form collaborative platforms so that industry stakeholders, which includes the government and the private sector, work as a collective.
“This will help us, as government, to provide the right trading environment for the private sector to be successful in their business,” he said.
Owing to the difficult trading conditions, the DTI will, moving forward, focus on several areas in the South African mining industry.
The first will be focusing on regional integration, for which the DTI has established a special unit.
Additionally, Timol said that several projects are currently “on the table”, which include the Regional Mining Vision, which is driven by the Southern African Development Community region and will feed into the African Union's broader African Mining Vision.
Progress will be reviewed in a fortnight, he averred.
In addition, Timol said, the DTI is “working hard on regional value chains”, which include the Continental Free Trade Agreement.
“As a collective, [mining companies] need to put your minds together and make your submissions to get your items on the agenda, so that we can push your interests to the benefit of your company and, ultimately, the mining industry,” he implored.
Supplier development will also be a focus area, with the DTI to investigate what mining companies are buying, from who, at what price and what volumes are being bought.
This, Timol explained, will assist the DTI to identify better localisation and import substitution opportunities, while also improving the competitiveness of suppliers.
Phase two, in which the DTI is aiming to start a conversation between supplier groups, mining and procurement companies, as well as manufacturers and suppliers, will assist in “closing the gap” and understanding what needs to be done for mining companies to rather invest and buy locally.
Focus areas in this regard, he elaborated, could encompasses technology transfers, systems and resource planning, as well as understanding, and improving, supply chain efficiencies.
Further, the DTI is also focusing on “negotiating the best possible deal” with the draft Mining Charter discussions. The draft charter is expected to be finalised by November.
“It is critical that we focus on strategic trade promotion and relationships. The way in which we’ve been doing things needs to change, and needs to be complemented by very targeted and systematic relationships, which we need to build,” Timol explained.
In a challenging environment, as well as having recently entered a technical recession, Timol believes the only way these challenge can be mitigated is through collaboration between stakeholders, as this will “far outweigh individual efforts”.
Exxaro local supply chain sustainability group manager Sandile Khumalo, meanwhile, reiterated Timol’s sentiments, adding that “transformation is imperative”.
Transformation, he told delegates, includes being committed to being a leader in transformation in the sector as well.
Khumalo believes digitisation and mechanisation will be drivers of competitiveness and that makes the conversation between stakeholders “unavoidable”.
The conversation must be contextualised with the pressing challenges that the industry is facing, he warned.
South African Capital Equipment Export Council chairperson and CEO Eric Bruggeman also attended the presentation on Tuesday, and promised the council’s support in helping to overcome the challenges facing the South African mining industry.