By Jacques Barradas, Director at BDO South Africa
President Cyril Ramaphosa delivered a reflective Mining Indaba 2023 speech, that emphasised and outlined the way Government and South Africa’s mining community can better work together to overcome its hurdles, says Jacques Barradas, Director at BDO South Africa.
On Tuesday 7 February, President Cyril Ramaphosa addressed a jam-packed audience at the Mining Indaba 2023. He spoke with a confidence not present during his previous Indaba appearance in 2019, giving me the impression that he is still strongly on the path to economic reforms. This sentiment was conveyed in a number of ways.
Back in 2019, the President laid out a 10-point plan for South Africa’s mining community. In a pre-covid world, the plan’s focus was on how the mining community should operate if they wanted the government’s co-operation. This year, the President was more introspective, recognising the role the private sector is willing and able to play in key areas where the government is struggling to perform. This came with an admission that in the past, South Africa did not reach its full mining potential.
The president went on to express his concern around the current decline in SA mining production. With the mining community’s 2023 production year forecast to contract by 9% compared to its record March 22 financial year, the President identified four areas of concern impacting mining, its commodity exports, and more broadly the large manufacturing economy that is dependent on this industry.
These four key areas were noted as follows:
1) The lack of a stable and reliable electricity supply in South Africa
2) The need for economic reform from government to allow for new investment
3) The lack of safety and security reflected in increased levels of illegal mining
4) The need to improve the regulatory environment
The mining community is already well aware of these problem areas and what needs to be done. But it was refreshing to hear the President address these areas of concern by outlining what the government is in the process of doing to enable the private sector to operate based on its interactions with the industry. These points included:
1. The government removing all regulations related to electricity generation — a move the President said he applauds the mining community for embracing more than any other industry.
2. A partnership that has been put in place between the presidency and the department of finance to assist and ensure there are consistent and active discussions within the treasury to enable the government to react quickly to bottlenecks and regulatory issues in the mining sector.
3. Making it a high priority to tackle the scourge of illegal mining. Privatising three critical freight rail lines, for example, is one attempt to overcome the sabotaging of the rail sector and enable ore to reach the ports. In addition, the government are in the process of partnering with the private sector to assist with rail, port and container terminals to enhance and improve efficiencies.
The government, as we know, moves very slowly. But, the President explained, they have actively been dealing with the backlog in regulatory approvals for the past eight months in areas such as environmental approvals to ensure new projects can be started. To help speed up this process, the President said that new world-leading software and systems are being introduced to assist.
Overall, the President’s speech delivered a strong, positive message for the mining industry. In particular this was reflected in his closing remark: “There can be no development without mining.”