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Mineral Resources Bill aims to stabilise local mining

South Africa is seeking to enhance and continue creating a conducive environment for investment, growth and job creationSouth Africa is seeking to enhance and continue creating a conducive environment for investment, growth and job creationThe Mineral and Petroleum Resources Development Act (MPRDA) Bill would not create an uncertain regulatory regime, Mineral Resources Minister Susan Shabangu stressed at the opening of the 20th annual Investing in African Mining Indaba in Cape Town on Tuesday morning, 4 February. It was the fifth time the minister had addressed the massive international gathering.

The Bill sought to optimise mining, minerals and upstream petroleum development; strengthen its content to enhance and continue creating a conducive environment for investment, growth and job creation; improve the ease of doing business by, among others, streamlining and integrating mining, environmental and water authorisation processes – committing the government to a turnaround time of up to 300 days for a mining right; balancing business needs with national development imperatives; building relationships between mining rights holders operating within a district municipality to improve community development; addressing loopholes identified in various court judgments, such as outlining detailed consultation processes; entrenching and augmenting the principle of security of tenure as an integral part of South Africa’s mining regulatory framework; and promoting South Africa’s minerals value addition.

To put the mining industry on a growth trajectory, the state had drawn up the Strategy for Sustainable Growth and Meaningful Transformation of South Africa’s Mining Industry. Limited infrastructure was identified as one of the binding constraints to this, prompting the formation of the Presidential Infrastructure Co-ordinating Commission (PICC). More than R820-billion had been committed to PICC investments.

"Mining infrastructure requirements feature prominently in the PICC in order to further unlock the known mineral development potential, such as the Waterberg coal resources as well manganese and iron ore in the Northern Cape."

Turning to mineral value addition, the minister said the MPRDA Bill enabled "the game-changing, win-win value proposition for local processing of minerals". Exporting unprocessed minerals denied South Africa the possibility for skilled employment, skills development and contribution to the fiscus needed to address its developmental imperatives. But she emphasised that no mining company would be required to beneficiate, or be forced to subsidise, the manufacturing industry.

Developing the petroleum industry

The Bill is in front of the portfolio committee. It also looks at state participation in developing the upstream petroleum industry, and Shabangu says, "We have consulted extensively on the Bill, and we are confident that it provides a predictable, stable and globally competitive mining legislation that promotes investment, inclusive growth, development and transformation."

In addition, the 10-year-old Mining Charter was also being reviewed. The minister said the review would be made public by November this year. Most mining companies had co-operated with evaluating progress on its implementation.

Speaking on transformation, Shabangu said, "Let me emphasise that transformation of the economy generally and the mining industry specifically should not be misconstrued as an event, but a journey and that transformation remains at the centre of development in South Africa… transformation remains an imperative of government and must be seen as a business imperative."

About the potential for onshore and offshore petroleum development, including shale gas, she said the final technical regulations for developing shale gas would be released shortly. "We will move ahead decisively, yet responsibly, with the exploration of shale gas, and unleash its potential contribution to, amongst others, cost-competitive energy security, employment creation and a range of other latent benefits to the country."

Offshore oil and gas prospects were also being nurtured, but "we cannot emphasise enough the need for South Africans to have a fair share from the development of their natural resources".

Turning to health and safety, Shabangu said there had been significant improvement in mineworkers' health and safety, and details of the industry's health and safety performance would be released shortly. The Mine Health and Safety Act was also being amended to strengthen provisions relating to the impact of mining on the health and safety of mineworkers and affected communities.

Labour instability was a topic of some discussion at the Indaba, particularly against the backdrop of ongoing strikes in the platinum sector. The minister said the government had intervened "boldly and decisively" to provide leadership and restore stability. "All stakeholders committed to a Peace and Stability Framework and subsequently, the deputy president-led process secured participation of stakeholders through the Framework Agreement for a Sustainable Mining Industry."

Ending on a positive note, the minister said: "I am confident that the democratic government has created an environment conducive for inclusive growth and enduring partnerships."

Substantial investments confirmed this, such as the R2-billion spend by Kalagadi Manganese and the African Development Bank in Kalagadi’s integrated mining and beneficiation project at Hotazel in Northern Cape; Glencore-Xstrata's sizeable inbound listing on the JSE in 2013; De Beers’s R20-billion underground expansion of Venetia; and the imminent development of the Waterberg JV project by Platinum Group Metals Limited.

"The African continent has begun the journey of the African century, which is focused on accelerating socio-economic development, to eradicate poverty, inequality and ultimately enhance the living standards of the African people. In this regard, African Union heads of state adopted the African Mining Vision as a framework for integrated development of mining in the continent.

"Africa's time, indeed, has arrived. We shall seize our future with both hands, and not fail," she concluded.

Shabangu had been introduced by Jonathan Moore, the managing director of Mining Indaba, who admitted that the past 12 months had been a challenging time for the industry. They had "challenged the durability of the sector and industries and governments vested in seeing mining flourish".

Many companies, he pointed out, had embraced the challenges and had used the time to prepare for future success. "And the future is very bright as global economies are in recovery. Foreign direct investment in Africa is expected to grow in 2014, 2015, 2016 and beyond."

There were many new features at the 20th Indaba, which has committed to educating the next generation of miners through initiatives such as bursaries for university students. "We are taking the progress of today to build a better tomorrow," Moore said.

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