There are at least eight major constraints that will need to be removed in order for the local mining industry to flourish says Roger Baxter, CEO of the Minerals Council South Africa.
Speaking at surface mining industry association, ASPASA’s CEO seminar, he explained that the economics of the sector is vast and accounts for about 8% of the country’s gross domestic product on its own or 17% when multipliers are factored into the equation. The industry also accounts for over R50-billion in PAYE contributions and is responsible for a large chunk of the country’s Company Tax revenue.
So, it is important that the industry be nurtured back to health and that hurdles to its success be removed. Baxter identified the following eight constraints that need to be dealt with to stimulate the industry:
- Lack of shared vision: This needs to be achieved through leadership, social and economic cooperation
Regulatory reform: The country needs to overhaul and modernise regulations and legislation surrounding mining.
- Industry modernisation: Despite hardships it is imperative that miners invest in modern techniques and equipment to improve productivity.
- Available infrastructure: The industry needs reliable and cost competitive infrastructure including electricity, rail and port infrastructure.
- Environment, social and governance: Sustainable mining can only be achieved through responsible mining including zero harm and injury caused on mines and inclusivity.
- Exploration strategies: The country needs to improve mapping of the entire sub-region as well as develop an improved exploration strategy.
- Eradicating crime: Strong measures need to be implemented to combat crime on our mines and to stamp out illegal mining.
- Promotion: South Africa needs to implement strategies to promote the country as a prime investment destination.
Baxter said that despite these challenges the industry is in a relatively good position having bounced back from Covid 19 lockdown restrictions. Since then, the industry has recovered to 0,8% higher production volumes than pre-Covid 19 figures despite 60 000 employees still not returning to work due to cautions relating to age or comorbidities.
“But more work needs to be done. South Africa needs to improve across all fields of mining. A good example is in exploration where countries like Canada attracts US$2 billion and Australia attracts US$1.8 billion in investments in exploration while SA attracts a meagre US$194 million.
“This will need a new mining cadastral with tax incentives such as offered in those countries. Also, relevant geological information is required online to attract junior explorers and interest major mining companies. Simultaneously, the country needs a one-stop-shop application process to streamline applications for prospecting rights.