How Will SA save the Mining Industry

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SA has its work cut out to save mining – IRR
Jul 19 2019 06:00 Khulekani Magubane, Fin24

“Project manager at the Institute of Race Relations Terence Corrigan has warned in a report from the think tank that government would have to introduce considerable policy changes if it hopes to pull the country’s mining industry out of its lull into a “renaissance”.

It has also called for the introduction of an independent minerals commission.

An excerpt from the report, titled Steering Mining into the Future: Can the mining industry prepare itself for a reinvigorated tomorrow?, argues that the recovery of the mining industry is possible, but will require “significant” reforms.

Since the beginning of the year – on multiple platforms, including the Investing in African Mining Indaba and parliamentary debates – Minister of Mineral Resources and Energy Gwede Mantashe has said mining in SA is not yet a sunset industry.

The IRR report, however, argues that South Africa has failed to follow best practice in several key areas.

It further states that South Africa’s current policy and regulatory regime is the culmination of a direction taken since the transition to democracy.

‘Nub of the problem’

Mining expert Peter Leon, cited in the report, says the Mineral and Petroleum Resources Development Act was an example of discretion afforded to the minister on mining rights and operations, which brought about uncertainty.

“The MPRDA essentially replaced the principles of private law, based on rights of ownership, with principles of administrative law based on conditional state licences.

“That, in essence, is the nub of the problem which the industry has faced since 2004,” Leon argues.

Even as the commodity boom was underway, South Africa’s failure to draw optimal advantage from it was to a large extent a matter of policy and administrative failings – even if other factors played a role too, according to Leon.

Leon argues that limiting executive discretion in the industry is an established best practice.

South Africa needs to rewrite the MPRDA in objective terms, along the lines of Botswana, which includes mandatory time limits for all licensing decisions, he adds.

Independent minerals commission

“South Africa should remove the high levels of administrative discretion that are currently so much a part of our minerals regime. It should also introduce an electronic online mining cadastre which many other African mining jurisdictions have done. We should introduce the system that Ghana and Brazil now have, which is an independent minerals commission to regulate the industry,” says Leon.

The IRR report says while minerals account for over a quarter of South Africa’s merchandise exports, mining remains strained, and indications for the future are not encouraging.

“Attending to the regulatory hindrances besetting mining is necessary, but it is unlikely to be sufficient for a revival of the industry’s fortunes. Much in the broader governance and societal ambit has a bearing on the industry, contributing to the costs of operations, and the desirability of undertaking operations in South Africa,” says IRR project manager Terence Corrigan.

Corrigan says even though the mining industry has been beset with tepid production and labour troubles, among other things, the sector still plays a significant role in the South African economy and remains worth investing in.

“If mining is no longer the foundation and backbone of South Africa’s economy, it remains an enormously important contributor to the country’s prospects.

“With a multi-trillion-rand trove of minerals, there is the potential – in theory at least – for a mining renaissance. Properly handled, this could mean a new lease on life for the industry and its sustainability into the future,” Corrigan says.

The report acknowledges that expropriation of land without compensation did not appear to register as a major concern for the mining industry, but argues that uncertainty on policy, broadly speaking, has made South Africa less attractive for investment.”

How Will SA save the Mining Industry

The future of mining lies in good leadership
4 JUL 2019

“The mining vision for 2030 is an industry that is growing in investment, production and revenue; is well regulated and well led by ethical leaders, and is competitive, appropriately skilled, modernised and invests in research and development., according to the Department of Mineral Resources’ Mining Leadership Compact

Effective leadership is key to achieving this goal, as the mining sector remains a critical part of the SA economy contributing, in 2017, 7% to GDP, 27% to total exports, 19% to fixed investment and providing 1,5-million direct and indirect employment opportunities, supporting more than 10-million dependents.

“The need for growing talent and leadership for the South African economy – and the mining sector in particular – is greater than ever before. The disruption that the Fourth Industrial Revolution is causing is significantly affecting 21st century mining, employment and skills,” says Professor Fred Cawood, director at the Wits Mining Institute.

He adds that organisational success and sustainability begins or ends with leadership. A leader is inextricably-linked to an organisation’s culture and shapes the leadership team which in turn filters this influence through every area of an organisation, including the performance and productivity of the workforce.

Effective staff engagement

As the South African mining sector is labour intensive, the performance of a mining company depends primarily on the productivity of its workforce.

“Leaders need to be appropriately skilled and empowered to effectively lead the organisation, but just as importantly, they must be able to impact employee performance through effective leadership and staff engagement,” says Cawood.

The institute will be holding a three day seminar entitled Empowering Leaders for 21st Century Mining’, covering important topics relevant to leadership in mining, specifically for women.from 6-8 August 2019.

Three modules will be covered during the three days. The first module introduces 21st Century Mining. The second is Transformation in Mining, in which leaders from industry and business share insights on transformation and leadership. The third module is Leadership for 21st Century Mining, which aims to empower leaders through the tools of self-awareness, personal development, mentoring, coaching, emotional intelligence and networking.

A visit to the Wits Sibanye-Stillwater Digital Mining Laboratory (DigiMine), which is a 24/7, digitally monitored, realistic underground mining environment. There will also be a visit to the exciting Wits Tshimologong Digital Innovation hub in Braamfontein is included in the programme, and attendees are eligible for continuing professional development (CPD) points.”


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