Good leadership is required to steer the South African mining industry through a myriad of challenges, says law firm ENSafrica mining department head and practice integration COO Otsile Matlou.

“The leadership of the mining industry needs to find common ground to move the industry forward and, through it, the economy. The clarion call to the leadership of the mining sector from government, labour, the industry and professional services is to rally together to revive the industry.”

He notes that a combination of factors has led the South African mining industry to one of its lowest ebbs in recent months. These factors include the volatility of the rand, fluctuating commodity prices, rising costs of production and environmental challenges occasioned by historical methods of mining, the standoff between the Department of Mineral Resources (DMR) and the mining industry with regard to the requirement for 26% black ownership under the Mining Charter, scarce capital for mining projects, increasing disillusionment in many mining communities and a general trust deficit among leaders of the mining industry – including government, key industry players and labour unions.

“The mining industry has been at the heart of most developments in the modern history of South Africa. The cocktail of misfortune facing the sector at the moment should be more than enough to ring alarm bells; however, the country’s mining industry leaders are continuing as though it is business as usual.”

Matlou points out that, with sluggish economic growth, a high unemployment rate, the erosion of social cohesion and significantly few mining projects being commissioned, many mines in South Africa are scaling down or closing their operations. “The gulf between the mining sector’s political leadership and industry leaders is manifest. This is not the time for positional play or posturing; it is the time for the mining industry to find leadership in itself.”

This leadership must, he says, seek to achieve a careful balance between the requirements needed to create a stable, investor-friendly mining destination, where the rule of law is paramount, and a sustainable industry that responds to the needs of the economy, providing job creation, community upliftment and a meaningful contribution to the national revenue fund.
“By all accounts, and when it matters, it is to the mining industry that South Africa looks for leadership. Unfortunately, it is also at this time that the Ministry of Mineral Resources and the DMR are experiencing a leadership transition. In all fairness, the new appointees need time to settle into their roles; however, the industry is in desperate need of direction.”

Matlou advises that leaders stop approaching industry issues from a sectoral perspective and instead adopt a vantage point that is simple and common to all leaders. He stresses that South Africa needs all role-players to meet at the centre of competing interests and work together to establish a stronger, more resilient and prosperous industry.

In addition, he says all stakeholders need to actively fight against corruption in both the public and private sectors and all holders of mining rights need to comply stringently with the law and the terms and conditions of prospecting and mining rights. Further, the DMR must take responsibility for properly and consistently enforcing the law, ensuring that the environment is protected through sustainable mining practices and that jobs are created through the development of mining communities.

ENSafrica will attend this year’s Investing in African Mining Indaba, held at the Cape Town International Convention Centre from February 6 to 9.