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Address by Minister Susan Shabangu, Minister of Mineral Resources Debate on the State of the Nation Address 2012

Address by Minister Susan Shabangu, Minister of Mineral Resources Debate on the State of the Nation Address 2012

15 February 2012

Honourable Speaker,
President of the Republic of South Africa, the Honourable Jacob Zuma,
Deputy President of the Republic, the Honourable Kgalema Motlanthe
Honourable Members,

Honourable Speaker

It has been said widely, in this august House and elsewhere, that the State of the Nation address this year provided a clear focus on the tasks that lie ahead of us as we seek to build the developmental state that the ANC-led government is so stoically committed to.

We, honourable members, are grateful to the President for having given us our marching orders to grapple with the question of how best do we use our bountiful mineral resources to build a society that brings benefits to all its peoples. The times are most challenging, recession is biting in different parts of the world, and we are determined, in the face of these challenges, to rise to the occasion and work hard within the parameters announced by the President last week..

It is encouraging that most of the honourable members who spoke in this house since the President’s speech have, in the main, been positive about our country. A far cry from what usually happens on occasions such as these – where there is a lot of grandstanding and political point scoring. Or, to borrow the phrase about political debate, more heat than light. We need to work together, across different political parties, to build a South Africa that truly belongs to all those who live in it and where there are no two South Africas. In this regard it is unfortunatre that the leader of the opposition, Honourable Lindiwe Masebuko, made a point about what she called "alternative vision for South Africa".

We should not repeat the mistakes of the past by striving for a partisan "alternative vision for South Africa". Instead, we require a vision for SA Incorporated founded on the urgent need to address the triple evils of poverty, inequality and unemployment. We must create a South Africa for all the people. That is not alternative. It is mainstream, and essential. In this spirit, I should like to outline some of the priorities that my Department has set itself. I speak from the vantage of that most significant sector, mining and mineral resources, which has underpinned our economy for well over a century.

JOB CREATION

As the President reminded us in his State of the Nation Address, democratic South Africa inherited a problem of structural unemployment going back decades. The New Growth Path introduced in 2010 identified the mining value chain as one of the key drivers of jobs. 2010 also marked the first year since the recession started that the mining industry was able to pass the half million mark in employment. Preliminary figures for 2011 indicate that the sector has continued growing its employment, with 15 000 net new jobs created between September 2010 and September 2011.

Honourable Speaker,

South Africa is developing a rich history of social dialogue. It was part of this proud tradition that led to the establishment of the tripartite Mining Industry Growth and Development Task Team, or MIGDETT, that looked into the issues of arresting job losses, and the future growth and labour absorption of the sector.

Working through this structure, we developed a growth and competitiveness strategy for the mining sector. In terms of this, the sector committed itself to job creation. Job creation figures released recently are encouraging and indicate that we are on course, slowly but surely, to meet our goal.

TRANSFORMATION

The growth and development of the mining industry cannot be delinked from addressing historical inequalities and imbalances in our society. In the mining industry, we have come a long way on issues of transformation. This year we are celebrating the tenth anniversary of the promulgation of the Mineral and Petroleum Resources Development Act (MPRDA). The MPRminerals in the State. The Mining Charter, on the other hand, introduced targets for transformation of the sector. Since the implementation of the Act and the Mining Charter, progress made in de-racialising the sector is noticeable but not yet satisfactory. Examples of areas of concern include:

  • inadequate active involvement of Historically Disadvantaged
    South Africans in the management and decision-making of mining
    enterprises;
  • Poor participation of women in mining;
  • Low levels of local procurement and supplier development; and
  • Low levels of human resource and skills development.

In his State of the Nation Address the President announced the amendment of the Broad-Based Black Economic Empowerment Act. My Department stands ready to ensure that the Mining Charter and the industry at large remain responsive to such amendment. My Department will also be dealing in a decisive manner with the incidence of non-compliance with the Charter and the prevalent cases of fronting in the industry.

INFRASTRUCTURE

As a sector we are greatly encouraged by the plans unveiled by the President in his State of the Nation address on infrastructure development. This intervention responds to one of the binding constraints to growth and development of the mining industry.

My Department remains committed to collaborating with other stakeholders in the intergovernmental structures to ensure that the critical infrastructure blockages delaying investment in the mining sector are addressed. Many of these were highlighted in the President’s speech and include investment in rail, road and bulk water infrastructure to unlock the mineral potential of the Waterberg and Steelpoort regions.

Unlocking this potential will also be critical in addressing another long-standing infrastructure bottleneck, that of energy security. As the soon-to-be-released Coal Resources and Reserves Study led by the Council for Geoscience reveals, these regions host a great share of South Africa’s remaining coal endowment.

The increased infrastructure will have the potential to increase our mineral export receipts and also serve the cause of local beneficiation.

BENEFICIATION

Honourable members,

The State of the Nation address reminded us again of the importance of the beneficiation strategy approved by government to address the important issue of adding value to South Africa’s minerals. This is an obvious way of furthering the interests of our own economy, the views of sceptics notwithstanding.

There have been numerous studies of our mineral endowment, some of which I have shared with you in the past; and these show the estimated value of our non-energy minerals to be in excess of US$2.4 trillion. This makes us the wealthiest mining jurisdiction. But we are still not fully reaping the benefits of that endowment. Too much of this mineral wealth is still exported as raw ore, while we import manufactured products from those same export destinations. This is essentially an exportation of jobs and economic value.

Our New Growth Path and the associated Industrial Policy Action Plan are, contrary to the views of some members of this House, a call for a paradigmatic shift in our mineral exploitation so as to maximise the long term returns from our endowment.

We need, as the President emphasized, to increase the level of the beneficiation of strategic minerals in a way that will expand downstream opportunities, and align those efforts with our industrial development imperatives. This means a value chain focus on enhancing the value of exports, stimulating investment in manufacturing, and creating opportunities for sustainable employment creation.

The beneficiation strategy will also contribute to the development of another key jobs driver in the New Growth Path, the knowledge economy. This will be through increased Research and Development and innovation and the development of competitive advantages, as linked to the priority value chains.

These priority value:

  • Iron ore and steel
  • Energy commodities
  • Autocatalytic converters and diesel particulates
  • Titanium
  • Jewellery

We have completed implementation plans for the first two and will this year focus on the finalisation of the remaining three. We will implement them hand-in-hand with the relevant government departments and industry stakeholders.

SUSTAINABLE DEVELOPMENT AND COP17/CMP7

As we reflect on the historic outcome of COP17/CMP7 held in December 2011 in South Africa, and look forward to the Rio plus 20 Summit to be held in Brazil later this year, government will engage the mining industry to do more to support our commitment to sound environmental management and to explore programmes that will reduce the carbon footprint. We will be embarking on a review of Environmental Management Programmes of holders of old order mining rights to bring them into line with the MPRDA as well as addressing inadequacy of financial provisions. This will ensure that we do not bequeath liabilities to the next generation -for it deserves nothing but the best.

HEALTH ISSUES

We will work hard to ensure that the mining industry “moves beyond the words”, as Ben Okri would say; for words sometimes mean absolutely nothing. We will ensure that we continue to apply without fear or favour provisions of section 54 to ensure that we reduce the carnage in our mines. We will do so as we attend to legitimate cases of concern that may arise in the application of the law. We will also work though the MIGDETT Task Team to deal with the concerns of the industry.

In this regard, I condemn in the strongest terms the violent assault and death of Ms Binky Moseane at Khomanani Mine in Rustenburg. She was robbed of her right to life in a senseless and brutal act. This incident is not only shocking but must not be allowed to take root in the mining industry.

Women have fought long and hard to earn their right meaningfully to contribute to this industry. I therefore wish to call on all businesses to take stringent measures to ensure that mines are made a safe working place for women where the principles of gender equality are wilfully implemented.

Women need to be protected and an enabling environment created for them to function without fear, harassment and discrimination. Management must take responsibility by putting systems in place to ensure that the incident that led to Ms Moseane`s death is never repeated. It is our expectation as government that we will never have to witness such an incident ever again as it does not have a place in this industry and in South Africa.

SKILLS DEVELOPMENT

As one of the key constraints to the growth and development of the mining sector, skills development will be a priority in 2012. The DMR is collaborating with the DHET through the MQA to improve on skills development with the following programmes:

  • Artisan Development.
  • Artisan Aide Development.
  • Occupational Health and Safety.
  • Improving women participation.
  • Developing black managers.
  • Skills required to support the Beneficiation Strategy.
  • Maths and Science.
  • Bursaries.
  • Work experience and internship.

In all, we are determined to play our role in making South Africa a stronger and more successful place for all its people, in line with the charge delivered by our President in this House.

End

     
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