The State of the Nation address referred to the sunrise potential of South Africa’s mining industry, but one still cannot see the required beams of light penetrating the darkness.
A somnambulant, chug-along approach is predominating, despite the widespread acknowledgement that mining can drive the economic advancement that this country needs and despite the future of particularly deep underground platinum and gold mines continuing to darken.
Gold mining group Pan African Resources last week confirmed the closure of the Evander 8 underground mine, which is expected to result in the retrenchment of 1 700 employees by the end of this month.
The fastidious company has been through the painstaking Section 189 process, following continued operational losses, exacerbated by the prevailing weak rand gold price.
At the same time, the World Gold Council reports a soft first-quarter gold demand on lacklustre investor appetite, stemming from a ‘wait-and-see’ approach to geopolitics.
Every time the platinum price falls below $900/oz, one recalls a former platinum company CEO saying several years back that a platinum price of twice that is needed for long-term sustainability.
Production has gone sideways, yet the platinum price refuses to rise.
What has South Africa Incorporated done to plan ahead in dealing with the price risks of the commodities business? What will prompt those in the lead to stimulate sunrise?
South Africans are in this economy together and need to work together for the common good.
As Joel Netshitenzhe points out in Towards Mining Vision 2030, a proper embrace of the National Development Plan could set us on a course towards the realisation of a more equitable society. (See also pages 10 and 11 of this edition of Mining Weekly.)
The achievement of some of the outcomes sought in the National Development Plan can at least take South Africa along the road towards alleviating the triple evils of poverty, inequality and unemployment and set us on a course towards doubling per capita income.
It is the mining sector, as Netshitenzhe rightly points out, that can catalyse far-reaching economic activity across the value chain, taking in the local manufacture of mining equipment, the local provision of a wide range of services, infrastructure development, skills development and research and development, highlighted by the work of the Mandela Mining Precinct, the official launch of which did not take place on May 4 as planed and will now take place at a date to be decided.
With most of South Africa’s resource endowments estimated to have long life spans, there should be no hesitation in working together to reap the long-term benefits these endowments have the potential to provide.
Grist to our commodities mill are the billions that are heading to global cities that will have to construct “the equivalent of the entire land area of Australia”, which cannot be done without the many minerals and metals that South Africa has in the ground.
So, let’s work together to dig value out of the ground efficiently and competitively.
In short, we need to put an end to our sleepwalking and get down to some serious business.