Shabangu massages the mining industry

Minister mineral resources Susan Shabangu addressed the SA Chamber of Mines’ 2012 annual general meeting on the 6th of November 2012. Here are extracts from her speech.

The overarching theme of my address this morning is about the journey of collaboration we have to traverse collectively to tackle the challenges that continue to confront us as stakeholders in the industry. We meet at the time when the industry is confronting unprecedented levels of unrest in the industry under the democratic dispensation. These moments are reminiscent of the dark days of the mineworkers’ action of 1987, and few more that preceded, all of which were directed towards ensuring that the dignity of mineworkers is restored.

This industry was a trailblazer for transformation in the country, with the sector’s regulatory reform and the introduction of a sector charter at the dawn of the millennium. The South African mining industry has changed significantly since the early 1990’s when a handful of corporations dominated mining activities in the country. At this time, the industry was still in the grip of political sanctions imposed on the country by the global community, which had forced the industry to pursue growth opportunities within the domestic economy.

You may recall that the dual ownership of mineral rights system, then in place, enabled the large 1dominant companies to hoard substantial mineral assets, restricting access of new players to exploitable minerals. With long term plans for mining held in safe custody these dominant groups played a significant in marginalising potential players in the industry – they in fact monopolised the mining industry and eve some of the associated industries.

The central pivot of all mining and mineral industry transformation is the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, promulgated on 1st of May 2004. The main revolutionary change introduced by the new law was that mineral resources should be vested in the State. Furthermore the new law embedded the principles of security of tenure, environmental stewardship and social responsibility. The other main principle is the requirement that the industry undergoes transformation and provides opportunity for the previously disadvantaged.

Accordingly, the promulgation of the MPRDA introduced an important document essential to the transformation process, namely, the Broad Based Socio-Economic Empowerment Charter, or the Mining Charter as it is widely known.

We have come a long way since the implementation of the Act and the Charter. There are successes that can be pointed out – however, I am sure most of you will agree with me when I say that there are still major challenges that we are facing. As regulators, we have acknowledged this and believe that we need to enhance the legislation. You would also appreciate that policy and legislation are issues that have to be continuously monitored and updated. It is precisely for this reason that we are finalising amendments of the MPRDA, benefiting from a decade-long jurisprudence, to, amongst others, strengthen the construct to remove ambiguities inherent in the law, streamline licensing processes, and enhance provisions for sanctions to non-compliance. We have evaluated the negative effect of fragmented approach to licensing requirements for mining, as a result of which my colleague Minister of Water and Environmental Affairs and I have initiated a process towards an integrated licensing approach in government.

Our respective officials are already at an advanced stage of finalizing recommendations for the “one-stop shop” approach to licensing requirements for mining, including both environment and water requirements, which is aimed at rationalizing this process, enhancing turn-around time.

Although we have progressed well on reformulation of the regulatory framework, we place have to place much greater emphasis on accelerating implementation with tangible results.

The annual progress reports indicate that the cumulative annual investment in skills development by the sector has reached 4.6% of total payroll, excluding the statutory skills development levy. Given the size of the payroll of the industry, this reported percentage expenditure is not insignificant by any imagination. However, a significant number of mineworkers remain unskilled and the industry is reeling from severe shortages of skills required to grow it. This observation confirms a contradiction that necessitates that we re-evaluate our skills development initiatives to ensure that they are indeed responsive to the needs of the industry.

I am also informed that the industry losses more than half of technical graduates in the first five years of employment to other sectors of the economy. This figure increases to above 70% in 10 years of employment. Introspection is necessary to evaluate ourselves and determine why we are unable to retain the very skilled workforce we need to secure our future.

This industry must use its creativity to leverage the procurement strength in support of local manufacturing, which will compliment and accelerate the socio-economic development priorities needed to address poverty, unemployment and inequality.

Notwithstanding tremendous progress made by the industry on health and safety matters in the past few years, I remain gravely concerned about the performance of some sectors, especially the platinum sector. It is clear that we have to do much more to improve both fatalities and occupational diseases in the industry through our intensified programmes. The department is also reviewing the Mine Health and Safety Act to create an enabling regulatory environment to speed up our efforts to continuously and massively improve our collective performance on health and safety in mining. I implore you to strengthen your resolve towards a “zero harm” industry.

It is my conviction that we must focus on a number of areas to be responsive and enhance our readiness to contribute towards additional creation of decent employment in the following areas:

a.     The procurement of goods and services from local sources that manufactures in South Africa;

b.    Aggregation of social development requirements (Social and Labour Plans) to meaningfully increase the footprint and impact of the industry towards development requirements;

c.     Utilisation of South African based facilities for analysis of all samples across the commodity value chain from exploration, through mining and metallurgy to value addition – this requirement will resuscitate the analytical facilities that were developed to support the mining industry prior to the democratic dispensation, which have emigrated to offshore;

d.    Execute concurrent mining rehabilitation, where possible, to bring forward post mining rehabilitation responsibilities and ensure sustainable land use; and

e.    Support for mineral beneficiation, as contained in the strategy that was adopted as policy last year.

We have pockets of excellence in our cooperation and collaboration as stakeholders. In the past, we created collaborative structures responsive to specific challenges, which have worked exceptionally well. I recall the time of the gold crisis as well as the mining charter crisis when such structures delivered results successfully, but were disbanded as soon as desired results were achieved. The recent example of this collaboration is aptly captured in our collaborative work of MIGDETT, the Mining, Growth, Development and Employment Task Team, which is constituted by us as Government, business and organised labour. As you know, MIGDETT constitutes our collaborative response to the vagaries of the financial crisis and has borne good results with job losses contained to a figure much less than originally forecasted.

There are many challenges that still face the mining industry today, which require everlasting cooperation and collaboration among stakeholders. It is a long held view of my department that we need to work closer with our stakeholders and to create a thriving climate for the mining industry. I am convinced that as you deliberate during your AGM, you will be redefining your content and structure and ensuring that it becomes relevant to today’s context. There is room of coexistence among us as stakeholders, brought together by a common dynamic. I look forward to meeting the new leaders of the Chamber, post this AGM.

I call upon you as a collective to stand up and be counted as mercenaries of sustainable transformation and growth. Let us work towards a common vision as contained in our most recent pact of 2010, duped the “declaration for sustainable growth and meaningful transformation of South Africa’s mining industry”.

I challenge the incoming leadership of the Chamber of Mines to work towards reversing the effects of the Land Act of 1913 that became the basis of continued repression of marginalisation of the majority to the benefit of the its members at the time. It would be wonderful for the Chamber to stand up next year and say, “hundred years later, we have moved towards total eradication of the policies of despotism to reclaim our legitimacy to the democratic society of South Africa”.

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