In the last Fraser Institute Annual Survey of Mining Companies 2018, South Africa improved its investment attractiveness and policy perceptions scores but still ranks in the bottom half of favoured mining jurisdictions.
Everyone in South Africa will benefit from a thriving mining sector, which can only be achieved by fostering investor confidence and building trust among all stakeholders.
How will Minister Mantashe achieve this?
The keynote address by the minister of Mineral Resources and Energy at the annual Investing in African Mining Indaba is always one of the best-attended events, as current and potential investors try to gauge future policy direction.
Here are some of the most important aspects that the Webber Wentzel mining team would like to hear Minister Gwede Mantashe discuss on February 3.
Health and safety
A significant drop in the annual rate of mining fatalities reported by the department of mineral resources and energy (DMRE) to 51 in 2019 from 81 in 2018 was welcome news. But we would welcome continued commitment from the regulator to assisting and partnering with employers to achieve the goal of zero harm.
An acknowledgment that measuring the total number of fatalities is merely an indicative (and possibly superficial) tool to assess workplace safety – and that one fatality is one too many – how will the regulator encourage positive and proactive steps to root out unsafe conditions and deal with risks before employees are exposed to danger.
The Minister should note that the number of injuries still remains high and that more work, deeper thinking, real collaboration between employers, employees, unions and the regulator and possibly changes of approaches may be required if the industry is to experience real changes in this space.
While there have been calls for changes to the Mine Health and Safety Act (MHSA) to stiffen penalties for non-compliance and calls for arrests of responsible persons, we do not believe amendments are necessary.
There are already penalties in the Act, but the lack of judicial action following workplace accidents and breaches of the Act points to a shortage of resources in the National Prosecuting Authority and the DMRE.
We would hope for a commitment towards completion of investigations, inquiries and the issuing of reports within stipulated time periods and a plan (in conjunction with the NPA) for ensuring that inquests are expeditiously held and that, when appropriate, criminal processes are followed.
We would welcome commitments to assess whether changes could be made to the manner in which judicial processes stemming from workplace health and safety incidents are dealt with, including potential development of specialist judicial officers to focus on the inquiries, inquests and assist with prosecutions while freeing up time and resources of inspectors to spend time at the mines and assisting with proactive compliance and safety monitoring.
We would like to hear the Minister speak to a clear, decisive plan of action to address illegal mining, the safety of mining operations and the increase in community related violence impacting mining operations.
Finally, we hope for clear policy direction coupled with an action plan related to the regulation and management of small scale artisanal mining to ensure that this can be done safety and within the regulatory framework, limiting unintended collateral impact on nearby and effected formal mining operations.
As South Africa’s mining industry moves into the 4IR, it is likely to operate more efficiently with fewer people who are multi skilled. This could result in retrenchments of employees who are not appropriately skilled for such an environment.
We would like to hear Minister Mantashe to be forward looking and not rely on the existing reactionary retrenchment legislation to address this inevitable development.
Forward looking measures could include tax relief or other incentives that would help companies to reskill or multi skill redundant workers well in advance of retrenchment to ensure they can be retained in employment in the mining industry.
At present, whatever reskilling takes place is normally the outcome of retrenchment consultations and is not mandatory. The reskilling usually includes basic trades such as bricklaying and the focus of the reskilling should move towards skills that will be necessary in a 4IR environment.
There could also be more co-operation between mining companies and government to implement relevant reskilling, for example co-funding of 4IR appropriate training programmes.
Although some of the most important regulatory uncertainties of the last few years have been addressed, we do not believe SA’s mining legislation encourages investment.
We would like to hear the minister’s thoughts on how legislation and a resolution to political instability can incentivise investment in the mining sector.
Within the DMRE, we have seen a welcome improvement in the mines health and safety inspectorate, with more engaged, interested and qualified inspectors being appointed.
There have also been welcome steps to tackle corruption in licensing. However, a growing problem has been that the revised Mining Charter has raised expectations among communities around the mines, and community activism is resulting in mine stoppages and disruptions.
We hope the minister will explain what is being done to assist mining companies with this issue.
The industry expects Minister Mantashe will announce measures to allow mining companies to generate their own power and detail what steps are being taken to address South Africa’s energy crisis. Energy is particularly critical as beneficiation is a cornerstone of mining policy, but it is not viable in an environment of high labour and electricity costs.
We would like to hear from the minister how the DMRE will strengthen the environmental compliance and enforcement branch of the department. How many additional environmental inspectors will be employed and how is the DMRE upskilling inspectors to enforce environmental infringements?
The industry is waiting for clarity on when the MPRDA Amendment Bill will be finalised to ensure the MPRDA is aligned with the One Environmental system.
Currently there are still outstanding issues, such as Section 102 of the Act that refers to ministerial approval of Environmental Management Programmes (EMPrs), which is outdated as this is now dealt with in Nema. These issues have all been discussed and resolved, but the necessary law is not in place yet.
In SA, many mines are approaching the end of their lives. We hope the minister will address the issue of sustainable mining, in particular how communities and land use can be made viable after mines close to use mining as a springboard for other economies.
AUTHORS: Jonathan Veeran, Lizle Louw, Kate Collier, Garyn Rapson, all Partners at Webber Wentzel