Ramaphosa outlines govt’s 4 development objectives for mining industry

President Cyril Ramaphosa says government is determined to remove all impediments, such as load shedding and illegal mining, to create an environment that will drive sustained growth in the mining industry.

The president on Tuesday said the fact that mineral production contracted by 9% year-on-year in November 2022 – largely due to electricity shortages and inefficiencies in logistics – was indicative of the challenges government needed to confront and overcome.

“In addition to the energy crisis and problems with port and rail operations, the outlook for the year ahead has been dampened by concerns about safety and security, illegal mining and the pace of our structural reform programme.

“These are precisely the issues that government is working to address,” said Ramaphosa.

2023 Mining Indaba

Ramaphosa made the remarks in his keynote address at the annual Investing in African Mining Indaba in Cape Town.

The largest mining-focused event on the African continent is taking place at the Cape Town International Convention Centre under the theme: ‘Unlocking African Mining Investment: Stability, Security, and Supply’.

The four-day event – which started on Monday and will conclude on Thursday – brings together mining executives, government officials and investors under one roof to discuss issues related to mining on the continent.

ALSO READ: Load shedding puts a damper on mining output

Ramaphosa said the mining industry continued to play a pivotal role in development and industrialisation across the African continent.

However, Ramaphosa said the industry was far from realising its full potential due to several impediments.

He said that government, industry, labour and communities had a responsibility to ensure that the mining industry is able to grow and become more globally competitive, especially when it came to sustainable development.

“To realise these objectives, we need to first achieve a secure supply of electricity.

“Secondly, accelerate economic reforms to improve the operating environment.

“Thirdly, tackle illegal mining and damage to infrastructure.

“Fourthly, improve the regulatory environment,” he said.

SA’s energy crisis

Ramaphosa said South Africa’s electricity crisis had a huge impact on the mining sector and government was working to add new generation capacity to Eskom‘s fleet.

RELATED: Mining Indaba: ‘Load shedding cost the economy about R1 billion a day’ – Mantashe

“Six months ago, we announced a National Energy Action Plan to improve the performance of our existing power stations and to add new generation capacity to the grid as quickly as possible.

“Eskom has assembled experienced technical teams to improve performance and recover capacity at power stations, with an initial focus on the six least reliable stations.

“Through a regional power pool arrangement, we have already imported 300 MW of capacity from neighbouring countries and are working to increase this by an additional 1 000 MW.”

ALSO READ: The inconvenient truth about Eskom’s Kusile power station

He said government was also strengthening the renewable energy programme.

“In the last six months, we have signed agreements for 25 projects representing 2 800 MW of new capacity. These projects will soon be proceeding to construction.

“We are facilitating investment in new generation capacity by private producers by, among other things, removing the licensing threshold for embedded generation projects.

“Eskom is looking to purchase surplus power from companies with available generation capacity,” said Ramphosa.

Ramaphosa also acknowledged that the mining sector was making moves towards generating its own electricity.

He said these projects supported mining operations and would bring down operating costs, and also add much-needed power to the country’s overall supply.

Economic reforms

On economic reforms, Ramaphosa said government was making efforts to accelerate economic reforms in the mining industry to improve the operating environment by reducing, for example, backlogs in prospecting and mining applications.

“As part of streamlining regulatory processes, we are reducing the timeframes for environmental authorisations, exempting energy projects from environmental authorisations for certain activities, and speeding up the process of registering new projects and grid connection approvals.

“A critical area of reform is logistics, which is a huge problem for the mining industry,” he said.

The president said reforms to improve the state of freight rail was moving ahead.

“One of these – opening key routes to third-party operators – will bring much-needed investment for upgrading, maintenance and rehabilitation.

“A new policy framework for rail sets out actions to modernise the rail network, enable private investment, improve regulation and restore rail as a competitive mode of both freight and commuter transport.

“Similar efforts are underway to enable private investment in our ports and certain container corridors.”

 Illegal mining

On illegal mining, Ramaphosa said government was focusing on tackling the problem and damage to infrastructure.

He said law enforcement agencies and government departments would also deepen their cooperation to stamp out illegal mining and other acts of economic sabotage.

“The South African Police Service has established multi-disciplinary Economic Infrastructure Task Teams that are operational in 20 identified hotspots. In the last six months, these teams have conducted around hundreds of operations and made a significant number of arrests.

“Transnet has developed partnerships with the industry and private security to address cable theft and vandalism on the freight rail network through advanced technologies and additional security personnel.”

Compiled by Thapelo Lekabe

NOW READ: Mining sector ‘a deadly battleground’ for gangs