HomeFeatures & AnalysisMore questions than answers from the Minister at Mining Indaba

More questions than answers from the Minister at Mining Indaba

The era for individual empowerment in the mining industry is over, and South Africa is looking to establish a new community based, commodity enterprise champion that will be “in it for the long haul.”

This was made clear by Ngoako Ramatlhodi, Minister for Mineral Resources, in his address to delegates at the Mining Indaba currently underway in Cape Town.

In his first opportunity to engage with the international mining community since his appointment, the minister made it clear that South Africa is open for business.

Both the minister and industry have emphasised their willingness to engage proactively about the future of the industry. “The mood at the Mining Indaba is generally less adversarial,” said Andrew Lane, Africa Energy and Resources Leader for Deloitte.

The minister reiterated government’s intent to achieve the objectives set out in the mining charter and said that this would inform his proposed amendments to the Mineral and Petroleum Resources Development Act (MPRDA). He also emphasised his support for the decision to refer the Act back to Parliament, saying that “the passage of the Bill is the key to unlocking investment.”

“His decision to refer aspects of the Bill that may be controversial directly to the Constitutional Court was an innovative move,” said Lane, “but I was hoping for more clarity on whether the developmental price would be more definitively prescribed in the new Bill.”

For Lane, the minister’s speech raised as many questions as it did answers.

“The reference to a national champion is intriguing,” he said. “Will this be the role of the state owned mining company? Does a national champion have to be run by government to be successful? Governments of resource rich countries around the world grapple with the issue of resource nationalism.”

Minister Ramatlhodi took a hard line on labour relations in his address, emphasising that “long term strikes would not be tolerated in the future.”

“It is not clear how he intends to achieve this,” said Lane. Effective engagement and communication is vital if strikes are to be prevented.

“Disputes are only resolved when there is direct engagement between all the stakeholders. That is why Deloitte has introduced a digital workforce engagement solution which facilitates communication and builds trust between the workers and management in the mining industry.”

On the issue of power and energy, the minister made his support for nuclear very clear.

“We are paying particular attention to energy,” he said. “There is no mining without energy so we are looking to new power sources, including renewables and the Great Inga project in the DRC to provide the electricity we need.”

The biggest risks to investor confidence in the mining industry are energy, labour and regulatory certainty. “The minister made clear statements of intent about each,” Lane said.

“But it remains unclear how he is going to execute on these.”