"In 2019, SA accounted for only 1% of global exploration expenditure and only 0.1% of greenfields exploration despite having an estimated resource of more than US$2.5 trillion of non-energy minerals."

Roger Baxter

CEO, MINERALS COUNCIL SOUTH AFRICA

June 23, 2021

How did the pandemic impact the South African mining industry?

In April 2020, South Africa went into a challenging lockdown. For five weeks, the mining industry was shut down, except for any industries that were considered to be essential, which included coal operations providing coal to Eskom and synfuel producers. Most mines went into care and maintenance, but smelters were still allowed to operate.

In February 2020, even before the WHO declared a pandemic, the Minerals Council engaged with the departments of Health and Mineral Resources and Energy and issued advisories to members about precautionary measures. We developed a risk-based approach in dealing with COVID-19, and our Standard Operating Procedures formed the basis of the guidance that was subsequently regulated by the DMRE. Having already put in substantial non-medical interventions – social distancing, wearing of masks, sanitising, as well as education - even before the first lockdown took place, gave the industry a significant head start on how to operate and reopen following the lock-down. As a result, we were able to work closely with the Minister of Mineral Resources and Energy and labour unions in ensuring that the industry could ramp up operations even while many other sectors could not. This in turn meant that the mining industry was able to make a substantial and better-than-expected contribution to the national fiscus in 2020. This was of course supported by strong commodity prices.

What are some of the most significant mining projects to look out for in South Africa?

Covid-19 has catalysed unprecedented levels of engagement, especially between the DMRE and the industry. Six task teams were established between the DMRE and Minerals Council to focus on exploration, the policy and regulatory framework, infrastructure constraints, local procurement and beneficiation, improving the operational environment including dealing with crime, a one stop shop to unblock outstanding mining licenses and rights and a communications task team.

A survey of Minerals Council member companies conducted in December 2020 indicated that they have about 170 outstanding mining rights, prospecting rights, Section11 change of ownerships, renewals and environmental authorisations which are holding back projects worth about R30 billion. We are engaged with the DMRE Minister and his Director General on ways to resolve these challenges and revive the mining industry. A one stop shop team has been looking at these outstanding rights and authorisations, and progress is being made by the DMRE in resolving the backlogs.

The DMRE has indicated that it will be implementing a new and transparent exploration cadastre system where information on exploration can be accessed, and that permitting process time can be reduced. In 2019, SA accounted for only 1% of global exploration expenditure and only 0.1% of greenfields exploration despite having an estimated resource of more than US$2.5 trillion of non-energy minerals. This is a massive missed opportunity.

Another crucial area where progress has been made is energy. South Africa still has an ongoing crisis with its energy utility, Eskom. The announcement made by President Ramaphosa in June 2021 to allow private companies to fund and construct embedded generation projects up to 100 MW is a major step in the right direction.

Another area of focus is unblocking infrastructural constraints such as port capacity and rail capacity, where an enormous amount of work has already been done so that transportation is carried out with more ease.

Finally, a critical part of the Minerals Council’s work are our initiatives and remarkable cooperation with local and international expertise aimed at innovation, modernising and further humanising our industry.

What are the main concerns with the current Mining Charter?

The 2018 charter was a massive improvement on the Charter proposed by the then Minister Zwane.

The two main areas of concern are firstly, the recognition of continuing consequences – when a black economic empowerment transaction was done historically and where the 2018 charter has indicated that when there is a sale or change of ownership, the transaction has to be redone. Our concern is that there needs to be solid certainty based on good legislation for investors, and good legislation is stable.

The second area is regarding local content on some of the equipment that is used in mining. For example, some of our mining operations use large scale trucks and there are limits to which local content can be implemented. Our contention is that the fundamental basis for implementing a local content policy was not entirely sound.

INTERVIEWS MORE INTERVIEWS

ENGIE is providing renewable energy to Quellaveco in Peru (Spanish interview)
Quellaveco, Peru’s newest copper mine, started production in July 2022 (Spanish interview)
"Our goal is to revolutionize the way agriculture is done in Africa."
"The country’s investment portfolio stands at US$60 billion, which is remarkable. The challenge is to execute these investments."

MACIG

Ramoth Services supports mines with engineering and construction in Ghana.

SUBSCRIBE TO OUR NEWSLETTER