Budget Vote 29: Mineral Resources, National Assembly, Cape Town, 19th April 2016

“We are a unique member of the global village, and ready for investment to move South Africa forward”

Address by the Minister of Mineral Resources, Honourable Mosebenzi J. Zwane, on the occasion of the Budget Vote 29: Mineral Resources, National Assembly, Cape Town, 19th April 2016.

Honourable Speaker of the National Assembly, Deputy Minister of Mineral Resources, Cde Godfrey Oliphant, Former Ministers of Mineral Resources, Chairperson and Members of the Portfolio Committee on Mineral Resources, The Chief Whip of the ANC Study Group, iNkosi Mandela, Honourable Members, Distinguished guests, Members of the media, Ladies and gentlemen.

Madam Speaker, we appreciate the opportunity to table before this House the policy statement of the Department of Mineral Resources.

This policy statement will allow us to execute our mission, which is to promote and regulate the mining, minerals and upstream petroleum sectors for transformation, growth and development; and to ensure that all South Africans derive sustainable benefit from the country’s mineral wealth.

Let me also take this opportunity to acknowledge the good work that has been done by my predecessor Cde Ngoako Ramatlhodi and all his predecessors since the dawn of our democratic dispensation. The foundation they laid through enabling instruments for the growth and transformation of the industry have restored the wealth beneath the surface as a national heritage vested to State. 

This foundation has led to gross fixed capital formation in the mining industry increasing from R18 billion in 2004 to R87 billion in 2014. Foreign direct investment in the mining industry grew considerably, from R112 billion in 2004 to R377 billion in 2014. Employment in the mining industry grew from 448 909 in 2004 to 495 592 in 2014.

As we take this baton, we are reminded of the importance of the month of April in the South African calendar, a month which ended almost four centuries of racial segregation and oppression and ushered in this young democracy. We honour all our fallen heroes in the struggle for liberation – from King Sekhukhune to King Bambata; from Ruth First to Victoria Mxenge; from Makanda Nxele to Solomon Mahlangu and Chris Hani – both of whom were killed during the month of April.

Our main priorities in the year ahead are as follows: enhancing regulatory and policy certainty, health and safety, as well as meaningful economic transformation. We remain resolute on these objectives, and today’s engagement provides us with a platform to outline how we will strive to achieve them, while mindful of the challenges posed by the global economy. Given the cyclical nature of the industry, spring will come, and we must develop material conditions for a greater portion of the population to benefit. In this regard, the State of the Nation Address has provided us our marching orders. All the issues pertaining to the Department which were highlighted in the SoNA are receiving our attention.

The Department has been allocated a budget of R1.669 billion in the year under review. The bulk of the Department’s budget is transferred to our entities, who are undertaking important work in the fields of research and development, beneficiation as well as community and enterprise development, to ensure the sustainability of the sector. I will later share some of their initiatives.

Madam Speaker, we will continue to deliver on our mandate to the people of South Africa – to create an enabling environment for inclusive economic growth and for decent work, in line with the Nine Point Plan and the National Development Plan.

To contribute further to the ease of doing business, Government has created a One-Stop-Investment Committee of Ministers.

The Social and Labour Plan (SLP) programme has gained some traction towards community development in both mining towns as well as major labour sending areas. We have enabled the construction of roads, schools, clinics and other critical infrastructure for our people, in areas such as Marikana, Lephalale and Mbizana to mention but a few. The implementation of SLPs continues to make an impact on improving the lives of communities. 120 SLP projects were implemented in the last financial year as a driver of local industry in mining and labour sending areas, and are due to be completed in this financial year. Through these and other initiatives over 7000 jobs will be created over the medium term.

One of our areas of focus in the current cycle of delivery is to substantially boost the community development impact from mining through better implementation of SLPs.

Partnerships between government and mining companies in the implementation of human settlement projects, as part of the Special Presidential Package, are yielding visible results.

In the past three years, 83 mining rights were approved by the Department, with the potential to create an estimated 22 000 jobs. We envisage that as we continue to grant approval for compliant mining projects to take place, we will be able to contribute further to the creation of jobs.

The economic situation has resulted in some companies in the sector, as in other sectors of the economy, announcing their intention to shed jobs. A Declaration was signed by stakeholders in August 2015 to save jobs and ameliorate the impact of job losses. Retrenchments must remain the last option used; after all other measures to save jobs have been explored.

Health and safety is the responsibility of employers, workers and Government alike, and we must therefore continue to adopt a collaborative approach in dealing with this matter. A lot has been done to ensure that the safety of our workers comes first, hence the statistics for the period ending 2015 show the lowest ever fatalities.

A critical factor in ensuring the sustainability of the mining industry is the health and safety of all mineworkers. It is thus regrettable that so early in 2016, a total of 21 fatalities have occurred as a result of mine accidents. A quantum leap in commitment is needed to stem the tide of mine accidents and to make our mines safer and healthier. In this regard, we recently engaged with CEOs in the sector to see how we can ensure a sustainable improvement in matters of health and safety in the remainder of the year. They have reaffirmed their commitment to the goal of zero harm and implement measures to ensure all workers return home unharmed every day.

We are saddened that on the 5th of February 2016, an accident occurred at Lily Mine in Mpumalanga. At the time of this accident there were three employees inside the container who were on duty – Mr Solomon Nyerende, Ms Yvonne Mnisi and Ms Pretty Nkambule. We have given our assurance to the families that we will do everything in our power to support efforts by the mine of ensuring that the container is retrieved.

The Department also continues to be greatly concerned about the health and safety of women workers, including the inhumane treatment they are sometimes subjected to by fellow workers in some of the mines.  All the stakeholders need to ensure that   there are effective interventions implemented at all mines to prevent intimidation and harassment of all mineworkers.

Later this year, we will also be hosting the Mine Health and Safety Tripartite Summit to review the state of health and safety at mines and reflect on the progress made to date in the achievement of milestones from the previous Summit.

We welcome the progress made in processing the Mineral and Petroleum Resources Development Amendment Bill. The National House of Traditional Leaders has considered its contribution, as a precursor to the processing of the Bill through both the National Council of Provinces and the National Assembly respectively. My Department stands ready to provide all necessary support to enable this House to process the Bill as seamlessly as possible.

The African Exploration, Mining and Finance Corporation (AEMFC) Bill has been concluded and was published in the Government gazette for public comments. The Bill will be presented to Parliament for processing during the course of this year.

Radical economic transformation remains central in the quest to normalise South Africa. Lessons learnt from implementing the Mining Charter are the basis for sharpening tools of implementation. The Mining Charter has been reviewed in order to further strengthen its efficacy. It was published in the Government Gazette for comments last week. Robust engagements with all stakeholders will commence during this consultation period.

Madam Speaker, South Africa has world-class mineral resources with a wealth of such minerals as manganese, Platinum Group Metals and chrome. Our mineral wealth is estimated at R50 trillion, excluding energy commodities and exploration potential. We are working with key stakeholders to develop a plan focused on the development of these minerals in a manner that benefits investors, workers and communities alike.

The current economic downturn has had a negative impact on the beneficiation of diamonds, gold and platinum. We have analysed the decline in diamond production as well as diamond cutting and polishing activities over the years. The cutting and polishing industries have not been performing to our expectations in recent years.

As a remedy to this situation, the State Diamond Trader has entered into a partnership with the Mining Qualification Authority to facilitate business growth and support for 25 youth in training in Italy. These young South Africans commenced with training in Italy in September 2015 and will complete the training in 2017. As part of the initiative, the students will be enrolled in the watchmaker programme in Switzerland to further their learning and exposure in watch-making. The Mining Qualification Authority has also developed a watch-making curriculum which is currently awaiting approval from the South African Qualifications Authority. This will be a ground-breaking programme taught for the first time at South African institutions.

Stability within the mining industry remains imperative to ensure its sustainable growth and competitiveness. The importance of healthy relations between mining companies as well as communities and local government, cannot be overstated. For mining to be sustainable, mutual respect and cooperation are critical. Right-holders must also engage continuously with the relevant communities, for the duration of their right, in order to pre-emptively address issues as they arise. We call upon our communities to also work harmoniously with right-holders.

The Department continues to engage various community structures, where discontent between mining companies and some host communities – often characterised by violence and destruction to property – has become more pronounced. While employment of people living close to the mines remains important, South Africa belongs to all who live in it, and opportunities from mining cannot only be limited to those residing nearer mining operations.  Mineral resources must be used to benefit the country as a whole.

The Department continues to provide support to the implementation of the Framework Agreement for a Sustainable Mining Industry.  As Government we continue to call on stakeholders to respect and implement the Agreement. I am aware that wage negotiations are about to start within the platinum sector and urge stakeholders to draw lessons from previous experience in this regard.

The future of the mining industry is dependent on research and development underpinning its sustainable growth and meaningful transformation. In this regard, Government is coordinating all the research initiatives across the mining value chain to ensure that its impact is optimised.

The Council for Geoscience (CGS) is focused on pre-competitive exploration activities, including high resolution mapping. This will ensure that we continue to attract investment into the sector and the economy broadly.

The Mine Health and Safety Council has commenced with the implementation of the Centre of Excellence (CoE) which has gained momentum and is expected to be fully-functional during 2017. Stakeholders have identified quick-win research projects which seek to address pertinent health and safety issues including developing devices that could assist in locating missing people underground, as well as enhancing dust suppression systems to reduce exposure to dust at mines, amongst others.

We continue partnering and working with all stakeholders in the sector, through the Mining Qualification Authority, to ensure that our skills development programmes target the unemployed youth, women, mineworkers, and people from various communities. The Mining Qualification Authority skills development programmes include artisan training and issuing of bursaries. For instance, 1000 bursaries were issued to learners mainly in the engineering fields.

Furthermore, in enhancing our capacity to evaluate and monitor compliance with health and safety issues at mines, 38 learner inspectors from the Department’s capacity development programme were recently employed after successfully completing a two-year training programme – 42% of these inspectors are women.

We are delighted with the state of South Africa’s petroleum exploration potential with frontier basins both onshore and offshore. This potential includes oil and gas. We have also noted the concerns of some members of the community on the potential impact of shale gas extraction on both the environment and water. We have accordingly taken measures to mitigate the risks inherent in the future.

Madam Speaker, we are a unique member of the global village, and ready for investment to move South Africa forward. South Africa is gearing up to host the International Geological Congress – simply known as the World Cup of earth sciences – from 27th August to 4th September 2016. This is the first time the Congress is being hosted by a member of the African Union, and will take forward objectives of the African Mining Vision. With over 100 years’ experience in the field of geoscience, we are indeed excited to welcome members from over 120 countries and 50 scientific associations.

Madam Speaker, we remain resolute and steadfast as we aim to maximise on delivering on our mandate, as our people expect no less from us. Working together, we are equal to the task and remain committed to effective service delivery.

More than ever before in our country’s history, we share a common destiny of a united, non-racial, non-sexist, mining industry. We can transform it only if we work together.

Let me take this opportunity to thank my organisation, the African National Congress – ANC Lives, ANC Leads.

My sincerest gratitude goes to the President for the opportunity given to me to serve in this capacity, and my Cabinet colleagues for their continuous support. 

I wish to extend my appreciation to those who wake up every morning to serve the people of South Africa – to the former Director-General Dr Thibedi Ramontja, and the acting Director-General Mr David Msiza, and all the staff of the Department of Mineral Resources; the Chairpersons and CEOs of our entities, as well as all those in Government who continue to support us. We wish to thank all those who continue to criticise us objectively, in an effort to develop the mining sector sustainably.

I would like to thank the staff in my office, my chief of staff as well as my advisors.

Most importantly, I would like to say thank you to my mother and my family for their unwavering support and prayers.

As I conclude, I would like to thank you all for your attention. The Department is honoured to be working with you in moving this industry, and indeed South Africa, forward.

Let me table the Budget for Vote 29 for the 2016/17 before this House and urge members to please support it.

I thank you. 

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