How does the mining industry in South Africa attract investment?

I strongly believe mining in South Africa still has a great future. We still employ 460 000 people and touch lots of families who depend on these 460 000 employees.

I have always referred to the mining industry as an industry of long cold winters and short beautiful summers, but I never anticipated it could/would be devastated by storms or tornadoes as well – especially in South Africa.

While the recent retrenchment announcements from the gold and platinum sectors are serious cause for concern, I believe we are still a strong sector of the economy.

The coal mining industry still has decent reserves in the Mpumalanga area and our electricity is 90% generated from this sector.

Beyond Eskom, our domestic coal market, which comprises cement producers, paper mills, chicken producers and others is still generating decent profits for some coal producers.

In 2016, we exported 72 Mt of coal out of Richards Bay Coal Terminal.

Beyond Mpumalanga, we have amazing resources in the Waterberg offering several options for our country.

In fact, we are going to be the energy provider for sub-Saharan Africa if not the entire Africa.

Of course, we also need to be aware of environmental sensitivities that have influenced  trends towards different energy mixes around the world, with a greater focus on, for example, solar and wind energy.

We must accelerate our strategy and investment approach to this sector.

The steel industry is still going strong thanks to Kumba Iron Ore and other iron ore producers in the country, followed closely by our manganese mining community.

South Africa is part of the global economy and we are competing with the best in mining and have to take our game to the next levels or we’ll have bid this important industry goodbye

Manganese and zinc will continue to be the life line of the Northern Cape and I am confident that entrepreneurs like Daphne Mashile Nkosi will take this industry to next level of low cost production and technological advancement.

Platinum Group Metals (PGMs) and gold (as I’ve said) still provide great value and huge opportunities – but we all need to appreciate the cost pressures and commodity prices that have not lived up to expectations.

It is time to manage expectations regarding the price of PGMs and of gold as well as global market conditions impacting on these metals.

South Africa is also still a key player in diamond mining, as we recently realised following Anglo American’s recent financial results.

And let’s not forget, we have other great resources which include chrome.

In further support of developing these resources, there is also huge potential to continue developing our junior mining sector which stands to benefit the mining industry moving forward.

I continue to meet great, established and aspiring junior miners who require assistance in many ways.

We must acknowledge that the game has changed

I am still of a strong view that Anglo American, South32, Glencore and other multinationals operating in South Africa still feel at home here and they do see value in operating assets in this country.

The mostly black-owned mining houses, which include ARM, Exxaro, Liketh and hopefully the recently formed Seriti Resources also believe in the industry and still have the patriotic zeal to operate in South Africa.

They also have  aspirations and ambitions to explore opportunities beyond the borders of our country.

What I can vouch for is that the leadership of the industry, often referred to as the ‘captains of industry’, is committed to the country and the creation of value for all.

So! South Africa may be firmly in control of its mining industry from all fronts but must acknowledge that the game has changed!

I am still of a strong view that Anglo American, South32, Glencore and other multinationals operating in South Africa still feel at home here and do see value in operating assets in this country

We must acknowledge that the advent of AMCU and its phenomenal growth has created a different form of dialogue and different rules of engagement.

The industry and all its stakeholders have adjusted well to this change.

The industry faces legacy issues related to retired employees, deceased employees and employees affected by illness or injury sustained whilst they were in the employ of the industry years and decades back.

There are orphans and ex-employees out there without knowledge that they are entitled to monies from our industry, be it their retirement funds or compensation entitlements,  and we must accelerate the process of dealing with this.

We must engage with respect and strengthen our partnerships with communities and listen more, rather than instruct and direct.

I am aware that in some instances mining houses have also been treated unreasonably with expectations and entitlements, but it is not always the case. This relationship must improve.

Never have two important matters in the mining industry been so intertwined as health and safety and production.

Our approach to the relentless pursuit for zero harm should be elevated always. At the same time, our competitiveness as an industry needs to have equal priority.

Simply defined, it relates to consistent growth of businesses with sustainable profitability to deliver value to shareholders and all other stakeholders.

This is going to be achieved through technological advances in mining. We are embracing mining 4.0 as the fourth industrial revolution sweeps through the global economy.

Every mining executive is embracing digitisation and the internet of things.

We have to embrace technological advancement for the sake of the industry’s future whilst recognising its impact on jobs.

The scourge of Illegal mining is creating a new set of challenges for mine leadership as well.

Again, I emphasise the power of partnerships amongst different stakeholders to deal with this scourge.

It is not only affecting mining companies but its unhealthy and unsafe and we have do more.

So why are we singing in discord? Why the brinkmanship? Why do we create complexity?

We face issues that if they remain unresolved, our country will lose great investment opportunities and other mining jurisdictions will forcefully take our place and we will be that irrelevant “has been”.

What must we do to ensure a great mining industry?

Our government must acknowledge now and here that the regulatory environment has deteriorated and we must jointly act.

Our industry is not anti-transformation.

I reiterate, the mining industry is not anti-transformation.

The mining industry embraced transformation a long time ago and will continue to do so.

We need to deal directly with the outstanding matters related to legislation and regulation and rekindle investor certainty.

We need a new Mining Charter. But it must be one agreed on by all the main stakeholders arrived at through honest engagement.

Business and labour represent two different constituencies with one common goal of growing the sector and delivering prosperity to the country.

The partnership for growth and prosperity will guarantee our country some jobs.

Common to our agenda is health and safety, productivity, superior corporate citizenship and old fashioned integrity.

Partnering with communities has never been as urgent as it is now.

Both mining houses and communities need each other. It’s all about dialogue to address grievances, clarify expectations and manage them.

Zero harm must be central to our daily agenda as we operate mines, period.

Difficult and sad to state, but whilst we embrace technology and usher digitisation or the forth industrial revolution, the social impact of this might be difficult to fathom and accept.

Our initiatives in this arena must be accelerated.

At the end of the day, mining still contributes to the GDP of our country and it still is a strong catalyst in economic growth and development of our country.

We must accept that other sectors or industries in our economy are becoming stronger and more relevant as technology advances.

We are part of the global economy and we are competing with the best in mining and have to take our game to the next levels or we’ll have to bid this important industry goodbye.

Feature image credit: www.123rf.com