S. African Mining Has Great Benefits For Investors: Minister

The South African mining industry has great benefits for investors across the value chain, Minister of Mineral Resources and Energy Gwede Mantashe said.

Demands of the 4th Industrial Revolution present new growth opportunities for the mining industry, Mantashe said in his opening address at the 2020 Investing in Africa Mining Indaba in Cape Town, the world’s largest mining investment conference.

“The industry must position itself to take advantage of this reality,” Mantashe told the delegates from across Africa and other parts of the world.

The minister said his department granted 28 new mining rights in coal, iron ore and manganese in 2019.

A potential of 4,800 jobs will be created from these and there will a capital expenditure worth about a billion rand (about 67 million U.S. dollars), he said.

“We must work together to convert these rights into active projects that can deliver the much-needed revenue and jobs,” Mantashe said.

Since the beginning of 2019, some commodity prices showed marked improvement, thus helping several mining companies to improve their balance sheets and register healthy profits, said Mantahse.

Average prices for most commodities are expected to remain relatively flat or have marginal growth in 2020 and beyond, according to the minister.

“This will provide a better basis for most mining projects in the coming years,” he said.

The minister said structural constraints and recent power outages have contributed to a grim economic outlook for South Africa.

According to the International Monetary Fund (IMF), South Africa’s GDP growth prospects for 2020 will be just under 1 percent.

The latest data released by Statistics South Africa show that mining production decreased by 3.1 percent year-on-year in November 2019.

The largest contributors to the decline in production were platinum group metals (PGMs), coal, and iron ore. On the positive side, however, “non-metallic” minerals made significant positive contribution to production.

Policy and regulatory certainty are key to attracting investments, Mantashe said.

“To this end, we remain committed and continue to work with the investor community on improving our regulatory framework to provide such certainty,” he said.

The government, he said, has advanced with the separation of the upstream legislative provisions for oil and gas from traditional minerals.

In December 2019, the government gazetted the draft Upstream Petroleum Development Bill for public comments.

“Since then, we have been receiving positive comments on the Bill and this is a signal to us that we are on the right path,” said Mantashe.

Economic growth and sustainability are bolstered in an environment of a secure and reliable electricity supply, he said.

To close the energy gap caused by deteriorating performance of electricity utility Eskom, the government is in the process of gazetting a revised Schedule 2 of the Electricity Regulation Act, which will enable self-generation of electricity and facilitate municipal generation options, according to the minister.

Depending on the circumstances, the self-generation plant may only require registration and not licensing, Mantashe said.

In December 2019, the government issued a Request for Information (RFI) – inviting responses from the market on innovative potential solutions to deliver power generation to the grid as expeditiously as possible.

Mantashe said his department welcomes all inputs from the market so as to give the department a sense of possible immediate generation options available in the next three to 12 months to fill the short to medium term gap.

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