Lekgotla focuses on unlocking mining potential in the Northern Cape

The inaugural Northern Cape Mining Investment Lekgotla, held in Kathu in early July, is the first in a series of three high-level economic reconstruction dialogues designed to contribute to improving engagement between the government, the investor community, local businesses and other stakeholders with a role in unlocking the potential of key economic sectors.

The lekgotla was an initiative of Nascence Advisory and the mineral resources & energy department, in partnership with Transnet, and adopted a regional and sectoral focus.

Logistics have been determined to be a key contributor to the growth potential of the sector, as well as the viability of junior or emerging miners. Transnet group CEO Portia Derby discussed the need to drive the cost of logistics down to ensure the SA economy is globally competitive. This, she said, is a fundamental change in Transnet, away from a divisional, modal service offering, to strategic participation and structured collaboration in an integrated commodity supply chain.

This means Transnet is focusing on what it is good at and is collaborating with the private sector where necessary to benefit the economy.

Speaking to the provision and expansion of reliable transport infrastructure, Transnet Freight Rail CEO Sizakele Mzimela said despite increasing capacity between 2016 and 2019 Transnet continues to suffer capacity constraints. Given that the main rail routes linking the Northern Cape with Gqeberha (Port Elizabeth) and Saldanha are running at capacity, Transnet is investigating alternatives. In particular, she said, Transnet is committed to better supporting emerging miners.

Inclusive mining is also a critical area which has emerged in fostering a stable mining sector capable of attracting investment. On this point Northern Cape premier Dr Zamani Saul said it was important that businesses based in the Northern Cape benefit from preferential mining procurement and that enterprise development takes place at all mining operations in the province.

Mines should ensure there are economic activities that continue to provide a livelihood for the people living in the mine’s host communities at the end of their lifespan, said the premier. He invited mining companies and investors to partner with the province to build a modern, growing and successful province.

The mineral resources & energy department director-general, advocate Thabo Mokoena, delivered the keynote address. He said that events of this nature deserve support given that they aim to move the mining industry in the province forward and create opportunities both for the residents of the Northern Cape as well as the country as a whole.

He also called for initiatives which allowed for greater local beneficiation of mineral resources, adding that SA needs an economy that is more productive, dynamic and inclusive.

He said the mineral resources & energy department is committed to providing more support for those mining companies under care and maintenance at present, as well as encouraging greenfield investments.

Transnet, Mokoena said, is on board to improve transport infrastructure. In addition to beneficiation, he called for more research to develop technology that would extend the life of mines, allow for better energy efficiencies and ensure a better utilisation of water resources.

The department is committed to collaborating with stakeholders to address any challenges facing the mining industry in the Northern Cape, he said.

Pointing out the potential of the Northern Cape, Minerals Council president Nolitha Fakude reflected on the key issues facing the mining industry. These include a reliable transport infrastructure network, infrastructure which is capable of providing an uninterrupted water supply, a reliable energy supply, skills, regulatory reform and investments into communities.

Apart from removing impediments to growth, attention has to be paid to expanding the sector in terms of commodities, as well as its longevity. Speaking to this issue, she said exploration investments need to be increased given that this is the lifeblood of the mining sector, adding that work has to be done towards targeting a higher share of global exploration expenditure to 5%, consistent with the share recorded in the early 2000s. 

Errol Smart, CEO of Orion Minerals, a global minerals exploration and development company, emphasised the importance of exploration and said the Northern Cape has incredible potential to supply the base metals such as lithium, nickel, copper, manganese and iron ore that the global economy requires.

However, he said, there has been no meaningful base metal exploration in SA since the 1980s. Orion Minerals recently signed a memorandum of understanding with the Council for Geoscience to collaborate on joint initiatives in the province with the aim of stimulating exploration activity in the region.

To attract the kind of share of investment quantity quoted by Fakude into greenfield mining exploration requires an environment conducive to foreign direct investment. This includes regulatory certainty, efficient exploration and an accelerated process to grant prospecting and mining rights. This included investment into modern mining technologies which allow for down-dipping extensions — the source of all modern mines — which have not yet been explored in the Northern Cape.

Sushil Kumar, the chief commercial officer of Vedanta, one of the world's largest diversified global resources companies with operations in the Northern Cape, said the company’s significant investment into its SA mining operations depended on a reliable source of energy as well as convenient transport infrastructure which includes the ability to move extracted products by rail to Saldanha, its closest port, for export.

He recommends Transnet segment new players from older and more established players which are less reliant on the commodity supercycle for their sustainability.

Also participating was local business, represented by the Gamagara Chamber of Commerce, which reinforced the inclusion of local enterprises, saying the new Kathu Industrial Park, situated in the heart of the mining and renewable energy sectors in the Northern Cape, will be relying on the high number of large original equipment manufacturers (OEMs) which supply those mines and renewable energy sectors.

The lekgotla concluded with the announcement that an additional R1.6m has been contributed by OEMs for bursaries for students from the Northern Cape to study engineering, to continually build the capacity of the sector and local youth participation.

This article was paid for by the Northern Cape Mining Investment Lekgotla.