MZILA MTHENJANE: No need to pit agriculture and mining against each other

Regrettably, the mining sector has unjustifiably been thrown under the bus in recent weeks.

First John Steenhuisen, speaking to Business Day wearing his minister-of-agriculture hat, said mineral prospecting was taking away “huge chunks” of valuable and productive agricultural land (“Agricultural land at risk from property development and mining, Steenhuisen says”, August 21).

Then, in a column which argued that the mining value chain contributes to inequality, Neva Makgetla questioned mining’s overarching contribution to the SA economy (“Overcoming mining dependency will call for tough trade-offs”, August 27). However, the column did highlight the sector’s positive impact as the country’s leading export earner.

The basic facts do not support Steenhuisen’s statement and understanding of the use of land for prospecting and mining activities. Furthermore, the apparent attempt to pit sectors against each other to pursue isolated departmental strategies goes against the collaborative spirit of the government of national unity that has been cheered by business and investors.

Any conflict between mining and agriculture is an exception rather than the norm. The fact is that SA is a large country, with a total land area of 122-million hectares. Ranked by area, it is the 25th-largest country in the world. Since 1994 the National Land Cover Datasets indicate that 10%-12% of this land mass is covered by cultivated areas. The corresponding figure for mining fluctuated between a mere 0.1% and 0.2%. Based on these stats land under agricultural activity is on average 100 times more than mining. It is hard to see how mining could be a material threat to agricultural activities, as Steenhuisen posits. 

Accepting that there could be vast tracts of land trapped by surface rights restrictions related to mining, and that these will only become available after mining activity has run its course, there is an opportunity for innovative collaboration between the minerals and agriculture ministries. Mining and agriculture are both primary industries that contribute significantly to GDP and employment in SA. In cases where the sectors do compete for land use, the relative returns of using the land for mining versus agriculture should be the overriding consideration in deciding the optimal benefit for the country. 

Besides these basic points, it is perplexing that Steenhuisen would mention mineral exploration as a concern for agriculture. For nearly a decade mineral exploration in SA has been in a dismal state. After peaking at R6.2bn in real terms during 2016, which in itself is not a high number, national accounts data from Stats SA indicates that spending on mineral exploration averaged only R1.4bn since 2016. To put this number into perspective, real fixed investment in agriculture averaged 23 times more at R32bn a year since 2016.

Exploration activities could not have been a constraint on agricultural activities. Indeed, over a prolonged period the Minerals Council has lobbied for a more conducive environment for mineral exploration, including advocating for the implementation of an effective online mining cadastre system to more efficiently manage mineral rights. This is now in process, and according to the department of mineral & petroleum resources will be installed and hopefully functional by June 2025.

With the facts in hand we encourage sectoral collaboration to find innovative solutions to common “enemies” that constrain investment, inclusive economic growth and employment creation in these key sectors of the economy. The case for working together in mining and agriculture is particularly strong as these sectors have faced several universal constraints. Until five months ago these included debilitating power cuts. The ongoing rail and port logistical challenges threaten mineral exports (coal and iron ore in particular) and agricultural (including citrus, table grapes and apple) exports.

As in many other industries, crime and corruption are another common foe. Mining and agricultural hubs are often in rural areas where poor municipal services and policing are a shared threat. A good example is the Northern Cape, where mining contributes 22% to the provincial GDP, with agriculture at 8%. In both cases these contributions are multiples of the contribution to the national GDP (6.3% for mining and 2.6% for agriculture, based on nominal 2023 numbers).

Access to reliable water resources is a growing concern for both sectors. These deep challenges will not be solved by a cross-sector blame game. Finding solutions to the problems requires the ministers and the best minds of mining and agriculture to work together, along with other stakeholders, to find solutions that encourage investment and growth of both sectors. This is not only for the betterment of individual industries, but also for the broader economy and society at large.

The Lebalelo Water User Association in the eastern limb of the Bushveld Igneous complex in Limpopo, and the Vaal Gamagara Water Scheme in the Northern Cape, where the mining sector is working with the government to ensure water for mines, farms and communities, serve as examples of the good that emerges from collaboration. 

Regarding Makgetla’s critique, the impact of mining goes well beyond generating export revenue, tax income for the fiscus and 480,000 direct jobs, to name a few. Mining has multiple downstream sectoral linkages. These include chemical (explosives), any number of materials and equipment needed for mining and processing, and extra heavy vehicle manufacturing. Mining has also provided a much-needed lifeline of demand from domestic construction firms, which have been under pressure for years amid a dearth of public sector infrastructure spending, a critical factor to stimulate growth.

Besides these demand linkages to other sectors, the effect of mining’s contribution to the fiscus is often underappreciated (by some commentators, not the National Treasury). Among other areas, mining taxes and royalties provide the funds for pro-poor social wage expenditure. This includes government outlays on health, education and social grants. Besides boosting the fiscus, mining firms’ procurement serves as a fundamental industrialisation drive, stimulating manufacturing and services industries and local mining communities.

In communities that host mines, companies are often asked — and expected — to step in to provide services failing municipalities cannot. The mining industry invests billions of rand in social and labour plans that underpin their mineral rights, encourage the creation of small and larger businesses to supply mines, and mine employees’ earnings, which totalled R190bn in 2023, support families and improve lives and livelihoods. 

The quest to shift the majority of our population from poverty and inequality to wealth creation and dignified lives is not the task of one industry, nor of the government alone. If not for a gross misallocation of mining-generated tax revenue windfalls, the broader societal impact of mining would have been far greater.

Private and public sector collaboration, intragovernmental co-ordination and cross-industry innovation are what will drive and transform the livelihoods of many South Africans. Rather than dismissing the virtues of the golden (mining) goose, we should seek even greater accountability from a government we have entrusted to distribute the wealth mining generates.

• Mthenjane is CEO of the Minerals Council SA.