The state of the mining sector featured prominently in President Jacob Zuma’s 2013 State of the Nation Address underlining the serious challenges facing a sector described in Zuma’s speech as the back bone of the South African economy.
The mining sector went through a rough patch last year which peaked with the Marikana massacre and raising fears that an escalation of the crisis will place multitudes of jobs on the line in a sector that directly employs about 500000 people. The fears became real when Anglo American Platinum announced last month a restructuring plan pillared by a retrenchment of 14000 workers.
Zuma said “Mining, which is historically the backbone of the economy, has faced difficulties in recent months”.
“Last year the sector was hit by wild cat strikes and the tragedy in Marikana where more than 44 people were killed”.
Added Zuma “Two weeks ago, I had a meeting in Pretoria with Sir John Parker, the chairman of Anglo-American Plc to discuss the reported plans to restructure and retrench 14 000 workers at Anglo American Platinum”.
“We believe that at a policy level we have managed to bring about certainty in the mining sector. The nationalisation debate was laid to rest in December at the ruling party’s national conference”.
“We established an Inter-Ministerial Committee made up of senior cabinet Ministers to assist families during that difficult period. The Judicial Commission of Inquiry led by Judge Ian Farlam continues its work. Through working together we were able to restore social stability in the area”.
Zuma seemed to address talk that South Africa might introduce further mining tax. “Ensuring that the public services we provide our people today can continue to be provided to our people tomorrow, requires that we have suitable tax policies to generate sufficient revenue to pay for these services”.
“From time to time, we have commissioned studies into our tax policies, to evaluate the extent to which they meet the requirements of the fiscus”.
“Later this year, the Minister of Finance will be commissioning a study of our current tax policies, to make sure that we have an appropriate revenue base to support public spending. Part of this study, will evaluate the current mining royalties regime, with regard to its ability to suitably serve our people”.
Zuma said “There are some lessons from Marikana and other incidents that we cannot allow to recur in our country”.
“Our Constitution is truly one of our greatest national achievements. Everything that we do as a government is guided by our Constitution and its vision of the society we are building.
We call on all citizens to celebrate, promote and defend our Constitution.
Our Bill of Rights guarantees that “everyone has the right, peacefully and unarmed, to assemble, to demonstrate, to picket and to present petitions”.
We therefore call on our people to exercise their rights to protest in a peaceful and orderly manner.
It is unacceptable when people’s rights are violated by perpetrators of violent actions, such as actions that lead to injury and death of persons, damage to property and the destruction of valuable public infrastructure”.
On the NDP
The National Development Plan (NDP) enjoyed a premium spot in the SONA and can be characterized a theme that ran through the speech. Zuma jumped into the NDP immediately after going through the niceties.
The president suggested that South Africa desperately needs a plan endorsed by all. “As South Africans, we should continue to have one primary goal – to make our country a truly great and prosperous nation”.
“The NDP contains proposals for tackling the problems of poverty, inequality and unemployment. It is a roadmap to a South Africa where all will have water, electricity, sanitation, jobs, housing, public transport, adequate nutrition, education, social protection, quality healthcare, recreation and a clean environment”.
“The achievement of these goals has proven to be difficult in the recent past, due the global economic recession. The crisis in the Eurozone affects our economy as the Eurozone is our major trading partner, accounting for around 21 per cent of our exports”.
Our GDP growth is expected to average at 2.5% cent, down from 3.1% in the previous year. We need growth rates in excess of five per cent to create more jobs.
“The NDP outlines interventions that can put the economy on a better footing. The target for job creation is set at 11 million by 2030 and the economy needs to grow threefold to create the desired jobs”.
“In my last meeting with the business community, the sector indicated that for the economy to grow three-fold, we must remove certain obstacles. We will engage business, labour and other social partners in pursuit of solutions. No single force acting individually can achieve the objectives we have set for ourselves”.
Zuma included in his speech the contentious phrase “essential service in reference to education. A signal that the ANC was considering to declare education an essential service which will translate into banning teachers from striking saw unions talking war recently.
Zuma said “We declared education as an apex priority in 2009. We want to see everyone in the country realising that education is an essential service for our nation”.
He was however careful enough to qualify his statements. “By saying education is an essential service we are not taking away the Constitutional rights of teachers as workers such as the right to strike. It means we want the education sector and society as a whole to take education more seriously than is happening currently”.
“All successful societies have one thing in common – they invested in education. Decent salaries and conditions of service will play an important role in attracting, motivating and retaining skilled teachers. In this regard, we will establish a Presidential Remuneration Commission which will investigate the appropriateness of the remuneration and conditions of service provided by the State to all its employees”.
Added Zuma “I have directed that the first priority should be teachers. The Commission will also assess the return on investment”.
On Land Redistribution
The land redistribution issue has also developed into a hot potato with talk that ANC members are demanding a more radical redistribution mechanism as opposed to the willing seller willing buyer approach. Talk that the ANC was considering to reopen the makeup of the land redistribution framework and to allow for the redress of pre 1913 dispossessions has caused excitement amongst many and unnerved others.
Zuma said “The land question is a highly emotive matter. We need to resolve it amicably within the framework of the Constitution and the law”.
“From 1994, we have been addressing the land reform problem through restitution, redistribution and tenure reform. As stated before, we will not be able to meet our redistribution targets”.
“Government’s mid-term review last year revealed a number of shortcomings in our land reform implementation programme. We will use those lessons to improve implementation”.
“Firstly, we must shorten the time it takes to finalise a claim. In this regard, Government will now pursue the ‘just and equitable’ principle for compensation, as set out in the Constitution instead of the “willing buyer, willing seller” principle, which forces the state to pay more for land than the actual value”.
“Secondly there are proposed amendments to the Restitution of Land Rights Act, 1994 in order to provide for the re-opening of the lodgement of restitution claims, by people who missed the deadline of 31 December 1998”.
“Also to be explored, are exceptions to the June 1913 cut-off date to accommodate claims by the descendants of the Khoi and San as well as heritage sites and historical landmarks”.