Without reform in logistics, mining will continue to flounder, says Cyril Ramaphosa
The president says SA’s energy and port crises are causing bottlenecks and putting serious pressure on the economy
President Cyril Ramaphosa has hailed the reforms of the mining industry over the past 30 years, but sounded the alarm about the urgency of more reform required in energy and logistics if the country hoped to restore the sector’s status as a “sunrise industry”.
“We will unlock massive new investment in SA’s rail system. This will support jobs in the economy through mining, trade and agriculture. As government, we have been open that without bold transformative reforms to the logistics sector, mining cannot flourish,” he said.
Ramaphosa was speaking at the opening day of the 30th annual Investing in African Mining Indaba in Cape Town, on Monday.
In a broad assessment of the mining sector over the three decades of democracy, he said the industry had undergone positive changes and reform.
“Over the past three decades, the mining industry has undergone significant transformation. Mining has been a pillar of the economy and 7.5% of GDP and accounts for 60% of exports by value,” he said.
Many of the wide-ranging changes in mining over the past 30 years were previously never thought possible, he said, including the introduction of the Mining Charter; the growth of black ownership in mining groups rising from 2% to 39%; improved labour laws; and employee equity.
“During apartheid the mining industry was notorious for labour exploitation, paying what we used to call slave wages. It was also notorious for human rights violations and poor health and safety standards. Today miners employ 476,000 people. It has come down from its heyday when it used to employ 1-million and later 800,000.”
Energy and port crises were causing bottlenecks and putting serious pressure on the economy, he said. These challenges were made worse by illicit mining, cable theft and vandalism, which all weighed down on mining output and returns.
“We face strong headwinds, and persistent challenges are impeding mine performance. Commodity prices are volatile, energy prices are high. Geopolitical tensions continue to cause enormous challenges and the cost-of-living crisis is playing a role in dampening the business environment.”
Initiatives were under way to arrest the collapse, said Ramaphosa. He outlined key objectives to develop the mining sector and enhance its competitiveness, including achieving secure power supply; improving business operations; and tackling illegal mining and vandalism.
He said 1,312 generation facilities with 1,300MW helped supply the mining load, with companies including Gold Fields, Anglo American, Seriti and Exxaro taking advantage of these.
The department of mineral resources and energy, through Mintec, was working to seal 251 ownerless and derelict abandoned mines and planned to seal another 352 in the coming years, he added.
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