7 minute read
South African mining remains a sunrise industry
South African mining remains
a sunrise industry
After the recent global self-isolation caused by the Covid-19 pandemic, our country’s excellent management of the virus made it possible for South Africa to host hundreds of delegates again physically at the 28th edition of the Investing in African Mining Indaba. Considered the largest, the Indaba allowed the government to engage with and lure potential investors to bring the muchneeded investments via the country’s mining sector.
During the Indaba, we made it clear, as per the keynote address delivered by President Cyril Ramaphosa and reinforcements by the Minister of Mineral Resources and Energy, Gwede Mantashe, that South Africa is an attractive destination for investment.
SA ready to welcome investments
Endowed with minerals such as diamonds, gold, coal, iron ore, platinum group metals (PGMs), manganese, chromium, copper, and uranium amongst others, South Africa stands ready to welcome investments that will translate into economic growth and development.
As a world leader in platinum group metals, the country is perfectly poised to take advantage of the growing demand for metals such as copper, nickel, cobalt, and rare earths. We consider these as future strategic metals that are yet to be fully exploited.
The minerals of the future, as Minister Mantashe generally refers to them, can be used in the development of the hydrogen economy – an economy that relies on this clean energy source as the commercial fuel that would deliver a substantial fraction of a nation’s energy and services.
The goal is to build a mining sector that responds to the long-term sustainability objectives and, the short to medium-term needs for access to energy, job creation and poverty alleviation and eradication.
In order to fast track the exploration of all minerals, the Department of Mineral Resources and Energy (DMRE), in collaboration with stakeholders in the mining industry, has developed the Cabinet approved Exploration Strategy for South Africa’s mining industry. Amongst others, the Strategy seeks to attract at least a 5% share of global exploration expenditure within a period of five years. It also aims to reignite mineral development, accelerate new mineral discoveries and encourage optimal utilisation of mineral resources in line with the environmental, social, and corporate governance principles.
Furthermore, the official launch of the data management portal by the Council for Geoscience is another significant milestone in the provision of quality geoscience data and information. The portal is accessible and available to all stakeholders and provides necessary information that should help in investment decision making.
While it is a matter of grave concern that South Africa has fallen into the bottom 10 of the Fraser
Institute’s Investment Attractiveness Index rankings,
it is also important to highlight that the Index ranks South Africa amongst the top 50 countries on policy certainty, with good quality infrastructure and ample availability of skilled labour. Such recognition is an affirmation that South Africa is open for business and encourages investments, particularly in the mining sector.
Nonetheless, going forward we contend that it would be appropriate for the Fraser Institute to not only rely on a desktop study but, to conduct field research among industry role players. The Institute must endeavor to collect data from as many respondents as possible. It is unjust to present findings based on the views of a handful of respondents (between 5 and 9), whereas the industry has many more players from whom data could have been collected. Collecting data directly from industry players will enable the Fraser Institute to present credible and objective findings.
Be that as it may, the DMRE is working hard to create a conducive environment for investments in the mining sector. This is evident in the clearing of the backlog of mining and prospecting rights and mineral rights transfer applications. Over 1 000 prospecting right applications were finalised and about 300 mining right applications were adjudicated in the recent past.
We are working on putting in place a modern and efficient cadastral system. The procurement process, which is undertaken in collaboration with the State Information Technology Agency, is underway and progress will be announced in due course.
We also recognise the role of small-scale mining and junior miners in the sector, and we are committed to support these important industry participants. Hence, we reiterate that applications for mining permits, and mining rights are open to all, irrespective of age, race, and gender.
Patricia Gamede, Acting Director General, Department of Mineral Resources and Energy
It goes without saying that every industry has its unique challenges. The mining sector is no exception and, faces some challenges in the area of health and safety of mineworkers. These matters continue to be a priority for government, as we tirelessly work towards achieving Zero Harm in South African mines, thereby ensuring that each employee returns home unharmed every day.
As part of our proactive actions to alleviate accidents in the mines, the DMRE will, later this year, host the Mine Health and Safety Tripartite Summit to consider further interventions that can prevent accidents in the workplace.
Notwithstanding a protracted heritage of mining, the South African mining sector has not only been a magnet for foreign investment but, has also been an anchor for the emergence and sustenance of several world-class industries which include energy, food, financial, manufacturing, water, infrastructure, and land-use.
Given its endowment with the minerals of the future, and more than 130 years of exploring and exploiting minerals, South Africa’s mining industry certainly remains a sunrise industry.
AUDIT • ADVISORY • TAX
A NEW PERSPECTIVE ON SUSTAINABLE MINING
In a sector as volatile and dynamic as mining, you need an adviser who is in touch with the latest developments to help your company navigate the opportunities and challenges. Trust our team of experts to guide you guide you through your ESG journey.
www.bdo.co.za
ESG G
Copyright © 2022. BDO South Africa Services (Pty) Ltd, a South African company, is an affi liated company of BDO South Africa Inc., a South African company, which in turn is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member fi rms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specifi c situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specifi c professional advice. Please contact BDO to discuss these matters in the context of your particular circumstances. BDO, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
The information contained in these documents is confi dential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of BDO South Africa Services (Pty) Ltd. The opinions expressed are in good faith and while every care has been taken in preparing these documents, BDO South Africa Services (Pty) Ltd makes no representations and gives no warranties of whatever nature in respect of these documents, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein. BDO South Africa Services (Pty) Ltd, its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and fi ndings in these documents.
