South African president Cyril Ramaphosa sounded many positive notes in his keynote address to Mining Indaba but did not indicate the direction of mining policy over the next 12 months, other than saying it would be investor friendly.
Webber Wentzel’s mining team welcomed President Cyril Ramaphosa’s clear intention, expressed in his keynote address to the 27th Investing in African Mining Indaba, that government and the industry will work together to rebuild the country, post-Covid-19.
The president sounded a positive note, a welcome contrast to some of the keynote addresses from South Africa’s mining ministers in the past, which were sometimes perceived as critical of the industry and investor-unfriendly.
However, the president delivered no details on government’s expected policy path for the industry in 2021. While this was disappointing, it might be explained by the absence of minerals and energy minister Gwede Mantashe, who was unable to deliver his speech because of a recent bereavement.
The following are the key areas noted by Webber Wentzel’s mining specialists.
The president's acknowledgment that sustainable mining is critical in unlocking innovation, competition and ensuring progressive societal impacts as well as the re-emphasis of the importance of ESG is welcomed messaging. It is, however, unfortunate that specifics on how government plans on reforming the existing regulatory framework was not provided.
It has now become increasingly important that government fulfils its undertaking to society and industry in relation to the facilitation of renewable and clean energy developments, in addition to its assertion of sustainable mining, by implementing holistically-driven policy reform.
Health and safety
The president’s emphasis on the need for employers to continue prioritizing safety and health was encouraging. He also showed government’s understanding of the interconnections between employees, their families and communities and how education, and public health protocols, in the workplace have an influence on employees’ wider networks.
The importance of preventing fatalities was also raised in the president’s speech. It is to be hoped that this will be followed by more discussions about the issues this year and finding solutions, from a regulatory and legislative perspective, to prevent fatalities.
The president’s comments about making South Africa’s mining industry more innovative and modern were also relevant, not only for the private sector but also for the department of mineral resources and energy’s processes and systems. Modernisation of the DMRE systems would support a more investor-friendly environment
While the president encouraged the mining industry to create jobs, he also mentioned the importance of technological advancement – which are not exclusive goals. However, what was lacking was a mention of the contribution that the government would make to encourage companies to modernize and create higher-skilled opportunities – for example, by offering tax breaks or other incentives.
The team was encouraged by the president’s acknowledgement of co-operation with the mining industry on rolling out vaccines, given the industry’s successful management of diseases such as TB and HIV. The industry is keen to move ahead with the rollout.
The team was pleased to hear the president urge the industry to foster inclusion, especially of women, and say that Social and Labour Plans are critical to ensure everyone benefits and no-one is left behind. He also said mining companies’ commitment to their SLPs should go beyond compliance, but unfortunately gave no further details. The team noted the President's comments that mining companies should foster an inclusive approach in all aspects of mining with specific emphasis on ownership, participation in management and procurement. It will be interesting to see how this will be executed. The President also commented that in order to grow mining activity, the South African government is working with the industry to formalize small scale and artisanal mining. This remains a topical issue in South Africa.
The industry had hoped for more detail on the alternative energy that government intends to promote, which could be confined to renewables, or could extend to other sources like hydrogen and clean fuels. There was also no further information on streamlining legislation and how government was managing the just transition.
Companies that are trying to find innovative solutions to South Africa’s green energy future are encountering regulatory challenges. These challenges have been raised with government over the past two years, but the president did not refer to any solutions.
Other energy challenges on which the industry had hoped for more clarity, but which the president did not raise, were how government intended to provide affordable energy and how it would speed up the issue of licences for self-generation projects.