South Africa’s mining sector a ‘sunrise industry’ – Motlanthe – by Henry Lazenby (MiningWeekly.com – November 27, 2013)

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TORONTO (miningweekly.com) – Despite some of South Africa’s mining sector critics pointing out the negatives, South Africa’s Deputy President Kgalema Motlanthe, who is on an official State visit to Canada, on Tuesday conversely endeavoured to lift out the positives, saying a lot of progress had been made in transforming the sector from a “sunset business” into a “sunrise industry”.

Flanked by South Africa’s Labour Minister Mildred Oliphant and Deputy Minerals Resources Minister Godfrey Oliphant, Motlanthe – in an intimate interview in Toronto – said South Africa was indeed ready and open for business, citing the achievements of almost 20 years of democracy having helped to transform archaic industry practices, designed to benefit employers at the expense of the poor.

“While some people would want to say that South Africa’s mining industry is a sunset industry, its in fact a sunrise industry,” he said.

Mining remained central to the SA economy. Motlanthe affirmed that the industry was still the country’s most significant currency earner and despite more than a century of intensive exploitation, the industry was but turning a leaf and was indeed poised for significant growth, boosted by newly overhauled mining legislation, dealing with inefficiencies, and by lifting domestic beneficiation levels.

As of 2007, the South African mining industry employs 493 000 workers and the industry represented about 18% of South Africa’s $588-billion gross domestic product (GDP). Despite mining’s contribution to the national GDP having fallen from 21% in 1970, to 6% in 2011, it still represented about 60% of all exports.

However, South Africa was in August ranked by the Canada-based Fraser Institute 64th out of 97 jurisdictions surveyed with regard to its competitiveness, and had a policy potential index of 35%. By comparison Botswana, ranked 17th, with a policy potential index of 78.1%.

Motlanthe noted that there were lots of proven deposits that were still to be exploited. South Africa’s mining industry is often wrongfully measured by the performance of the gold sector, and yet other subsectors such as iron-ore, diamonds, manganese, platinum and chrome where overlooked, he argued.

ENHANCED LEGISLATION

Motlanthe said Canadian investors and mining industry participants were most interested in asking the high-level delegation about issues surrounding the labour relations framework, energy supply to the mining industry, and on issues regarding the Mineral and Petroleum Resources Development Act (MPRDA), which was currently being amended.

The amended MPRDA would also overhaul the licensing processes so that companies applied for mining licenses at a single office, so that the water supply and the environmental impact assessments would be processed simultaneously. “That would result in shortening the turnaround time for juniors significantly. In the past it was done sequentially, and therefore took much longer,” he noted.

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