Mining’s role as economic transformation lever must be used to the full

24th March 2017

By: Martin Creamer

Creamer Media Editor


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For the past century, the view of mining by the governments of Africa has been deficient, as it prioritised rent maximisation and ignored mining’s innate ability to function as a powerful lever for structural economic transformation.

Rightfully, this point is being emphasised by African Minerals Development Centre director Kojo Busia, who is also correct in drawing attention to a decisive move away from this enclave mentality of mining as a result of increasing influence being brought to bear by the African Mining Vision, which many South African mining leaders are now also taking to heart.

South Africa’s Department of Mineral Resources (DMR) should have been first to recognise this and should by now have been working with the Department of Trade and Industry and the Department of Science and Technology to get the best out of the ability of mining to boost entire value chains.

Instead, the DMR seems more intent on gazetting one-sided distractions that undermine the entire economy, instead of having enough insight to know that mining has the fantastic potential to serve as an economic launch pad for business activities outside the mining arena.

The irony is that, while South Africa’s mining potential diminishes under DMR mismanagement, the economic potential of many other African countries is being boosted by the pursuit of the Africa Mining Vision and the Zambezi Protocol.

Both are being increasingly viewed as useful in dealing with governance and then linkages between the minerals sector and other aspects of the economy.

But South Africa’s DMR ignores all this, despite this country’s economic growth remaining inadequate to drive the changes required for the country’s socioeconomic challenges.

What is worse is the continued delay in the promulgation of key minerals legislation, which is deterring the investment required to make South Africa’s mining industry fire on all cylinders, a strong point that has been reinforced by Exxaro Resources CEO Mxolisi Mgojo.

Exxaro, which has been a model black-controlled mining company, has found maintaining that high level of black share- holding inhibiting on the growth of the business.

But those who have never been in business and know nothing of its huge challenges continue to throw up obstacles when they should be asking how they can assist.

I have been present when Ministers in neighbouring Botswana have done just that in open forums and followed up with site visits.

How shortsighted is the DMR in constantly seeking to make matters worse for the mining sector and, in so doing, make matters worse for the people of South Africa as well?

If the DMR had South Africa’s economic interests at heart, it would have been going all out to assist the platinum mining sector, which is under great strain from low prices at a time when other commodity prices have been showing positive increases.

For once, DMR, surprise South Africa on the upside, instead of continually putting it on a lower trajectory.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor


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