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Mantashe highlights challenges facing South Africa’s mining sector

18th January 2019

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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Mineral Resources Minister Gwede Mantashe has stressed that the key factor in the future of South African mining is the human element.

He was delivering the keynote address at the launch, in Pretoria, last month, of a book – titled The Future of Mining in South Africa: Sunset or Sunrise? – by the Mapungubwe Institute for Strategic Reflection. He started by quoting Chinese leader Xi Jinping, who was writing about Deng Xiaoping, the author of the reforms which have dramatically transformed China: “Deng Xiaoping gave priority to the status and role of the people.”

“Mining is about people,” affirmed Mantashe. “When it is not about people, it collapses.” He emphasised that the people included both mineworkers and members of communities adjacent to mining operations. With regard to whether mining would be a sunrise or sunset industry, the Minister said: “We have to refer to its relations with people.

“My own view is that it has always failed to relate to people in a way that would make it a sunrise industry,” he said. Growing demands from communities comprised one of three pressure points he identified as ‘squeezing’ the local mining industry.

He reported that, after he had been appointed Minister, he visited all the main mining areas “to reconnect with those communities”. They informed him that the mining companies did not talk to them. He passed this on to the companies and also told his own department that it was also failing to communicate with these communities. He affirmed that it was the responsibility of mining companies to ensure that their relations with communities were healthy.

A second pressure point was the general attitude in the country towards mining. “Mining is not a loved sector,” he observed, drily.

The third pressure point was increasing environmental demands. “If mining is reckless about [the environment], it is not going to survive,” he said, adding that the industry had to mine responsibly. “If it does not, it is going to be in trouble.”

The mining sector also had to adopt and adapt to the Fourth Industrial Revolution. He noted that South African mining executives tended to be nervous about these technological developments. He said his response had been to point out that every technology, throughout history, had used inputs that were mined or grown.

If these issues were not addressed, he stated, then mining in South Africa would be a sunset industry. If they were addressed, it would be a sunrise industry.

In addition, he defended the role of coal in the country’s energy mix and complained about the harmful effect of high electricity prices on the local beneficiation of minerals. He stated that he was discussing these issues with his colleague, Energy Minister Jeff Radebe.

“South Africa – what a strange nation!” he exclaimed. He affirmed that South Africans “like to destroy what they have” in the hope of better things to come. They wanted to shut coal mines now “for a better future”.

While accepting that renewable energy would be important in the future, he highlighted that State-owned electricity utility Eskom generated electricity at its Koeberg nuclear power plant at some 40c a unit, and that its coal-fired power plants did so at about 80c a unit, but it was buying renewable energy from independent power producers at about 220c a unit. He affirmed that it made no sense to spend 220c on a unit of electricity when you could spend 40c on nuclear and 80c on coal.

Coal was needed now, he stated, for baseload electricity. He highlighted that there had been a major new coal discovery on the Springbok Flats, with seams about 9 m thick. But South Africans were hypocritical about coal. They were hostile to it, until load-shedding occurred, when they wanted to know where the coal was.

The increase in electricity prices had undermined the country’s mineral beneficiation ambitions. He cited the case of manganese. “Our black iron is in demand everywhere. But we can’t beneficiate it here . . . because our electricity prices are prohibitively high,” he asserted. “Those electricity prices make beneficiation a dream.”

Mantashe worked for 30 years in the mining industry as a mineworker and then as a union official.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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