President Cyril Ramaphosa has moved to assure investors that government is addressing the challenges facing the country to ensure that South Africa reaches its full mining potential.
The President was speaking at the Investing in African Mining Indaba held at the Cape Town International Convention Centre on Tuesday.
“We have a responsibility as government, industry, labour and communities to ensure that our mining industry is able to grow, to become more globally competitive and to be a pioneer in the global drive towards sustainable development.
“To realise these objectives, we need to… [f]irstly, 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.
Honing in on energy, the President told investors that government has already introduced the Energy Action Plan to improve “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 1000 MW.
“The successful renewable energy programme is being strengthened. In the last six months, we have signed agreements for 25 projects representing 2800 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,” President Ramaphosa said.
Furthermore, he said, Eskom is also looking to “purchase surplus power from companies with available generation capacity” to further strengthen the grid.
President Ramaphosa said another area earmarked by government is reform in logistics.
He highlighted that last year coal exports dropped by at least 50 million tonnes – the worst performance in some 30 years.
Coupled with that, infrastructure inefficiencies effected a 15% decline in mineral sales.
“We therefore welcome the partnership announced late last year between the Minerals Council of South Africa and Transnet to stabilise and restore the operational performance of our rail lines and ports.
“The reforms we announced to improve the state of freight rail are 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,” he said.
Turning to illegal mining and infrastructure damage, President Ramaphosa said specialised law enforcement teams are on the ground to tackle that criminality.
“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,” President Ramaphosa said.
According to the President, government is working with the sector to reduce the backlog of prospecting and mining applications and to improve the industry’s regulatory environment.
“I understand that over the past 18 months we have reduced the backlog of applications by 42 percent and plans are in place to eliminate the backlog in the short to medium term.
“The Department of Mineral Resources and Energy has indicated that the process for procuring an off-the-shelf cadastral system, which can be customised to South Africa’s needs, is underway. This is essential for the operation of a modern mining rights administration system, which in turn is vital for the growth of the industry.
“These are some of the efforts we are undertaking as South Africa to improve the business operating environment for a sector that is the lifeblood of our economy and that of the continent,” he said.
The President insists that although South Africa faces several challenges, “investors will find South Africa as an attractive destination for miners and associated sectors”.
“This is a challenging time for mining, both in South Africa and across the continent.
“However, we have the means to overcome our difficulties and forge a brighter future for this industry. As the world changes, mining is changing with it and the industry stands ready to seize the opportunities that the future presents,” President Ramaphosa said.
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