JOHANNESBURG (miningweekly.com) − To help create jobs in what will remain a challenging macroeconomic environment for the foreseeable future, the Department of Mineral Resources and Energy (DMRE) says it will fast-track its capital expenditure (capex) projects planned for the next five years.
If an allocated R25-billion can be spent on capex projects, including liquid petroleum gas, it could create 100 000 new jobs, contribute an additional R40-billion to the economy and contribute an additional R9-billion to government revenue.
Additionally, the DMRE will bring forward medium- to long-term capital projects to be executed in the 2021/22 to 2023/24 financial years, which mostly involve energy programmes.
This projection was delivered by DMRE director-general Advocate Thabo Mokoena during his presentation of the department’s plan in response to Covid-19 and its related challenges for the mining and energy sectors.
The department briefed the Portfolio Committee on Mineral Resources and Energy, and the Select Committee on Land Reform, Environment and Mineral Resources and Energy on May 26.
The briefing follows after the DMRE witnessed a surge in positive Covid-19 cases reported from various mines, predominantly in the Gauteng and Limpopo provinces.
The mining industry had a total 312 confirmed Covid-19 cases as at May 26, with two mines having temporarily closed owing to a large number of cases confirmed at a single operation.
Although the DMRE has promulgated legislation that requires mines to develop a Code of Practice related to Covid-19, some unannounced visits by the department over the last few weeks confirmed that while most mining companies are effectively screening employees for symptoms of the virus, there is not sufficient testing of suspected cases.
Mineral Resources and Energy Minister Gwede Mantashe says the department has informed the Minerals Council South Africa of the compliance status discovered by the department and urges mining companies to test their workers for Covid-19.
Responding to a question posed by a committee member, Mantashe pointed out that it was crucial that mines ramp up production to preserve jobs. “If we keep mines closed, we risk losing those jobs,” he says.
In developing its focuses and strategy in response to Covid-19, the Minister and Mokoena highlight that the department has taken cognisance of the reduced global demand for commodities, the global shrinking of major economies that are trading partners of South Africa, major companies not being able to absorb losses on a sustained basis and the possible closure of operations by large mining companies.
Mantashe notes that, during the Level 5 lockdown, four companies approached the department to issue Section 189s, which deal with retrenchments. However, the department managed to stop this process, partly owing to the limited movement of labour unions during this time.
Further, the Minister urges that the world must learn to live with Covid-19 in its communities. “As we have adapted to the human immunodeficiency virus, we will adapt to Covid-19 to minimise the spread of the virus.”
Mokoena says it is a distinct possibility that mining applications will be withdrawn as a result of a lack of funds to proceed, while there may be a migration of prospecting and exploration activities to other countries.
Moreover, in the department’s response plan to Covid-19, Mokoena says it will support the health sector in diagnosing the virus and create new jobs by aiding the local manufacturing of the necessary goods – sanitisers, masks, test kits, antigens and antibodies.
Additionally, the DMRE will build capacity to enable State-owned minerals company Mintek to proactively respond to economic opportunities, while helping to accelerate the department’s battery programme and the industry’s production of medical isotopes, industrial isotopes and fluorochemicals.
To help advance the country’s exploration, the DMRE will soon finalise amendments to the Geoscience Act regulation, while the Council for Geoscience will conduct exploration in four priority target areas for handover to the department.
The mineral targets to be explored will contribute to renewable energy in support of the Integrated Resource Plan 2019, electronics in advancing the Fourth Industrial Revolution and fertilisers in the agricultural sector.
The four target sites are Garamokoka, Kenhardt, Kleinfontein and Giyani.
To help avert job losses within the upstream mining sector, the DMRE will ramp-up beneficiation through the reduction of input costs for smelters and fabricators; request for reduced charging of duties or fees on precious metals industry trading; and a request for temporary valued-added tax exemptions on imports of gold, precious metals and diamonds that are destined for beneficiation.
The DMRE will seek to relax licence fees for jewellers and diamond beneficiators, as well as temporarily suspend proposed service fee increases on diamond valuation, exports and imports.
Additionally, the department will identify social and labour plan projects of high value and impact to collaborate on, which will help ignite regional commercial activity.
The department will fast-track complying Section 11 – or mining right – applications to create additional jobs and save existing ones.
To ease the financial burden on companies, the DMRE will also help them use certain sections of legislation to facilitate approval or relaxation or deferment to comply with financial requirements.
The Small-Scale Mining Fund will be used to assist small and junior miners restart their operations; this fund was allocated R25-million in the department’s budget at the start of the year for this purpose.
The department also plans on using the interest portion of the Rehabilitation Trust Fund to fund mining operations in distress, to save jobs.