Minister Gwede Mantashe’s speech at this year’s Mining Indaba omitted to address various pertinent issues on which investors have been seeking clarity and certainty.
Minerals and Energy Minister Gwede Mantashe’s keynote opening address to the Cape Town Mining Indaba on Monday was unlikely to satisfy the industry’s need for concrete action on the various hurdles and uncertainties that are restraining investment in South Africa’s mining sector.
Webber Wentzel’s mining team welcomed the minister’s mention of the industry’s need for cheap electricity, but was disappointed that he did not explain how this would be achieved, opting rather to refer obliquely to promises that President Ramaphosa is due to make at his address. The government last year relaxed the onerous regulatory requirements for entities desirous of generating power up to 100 MW. However, the process of obtaining the necessary permissions remains slow, marred by administrative delays, and the minister did not explain how this would be accelerated.
The minister also referred to South Africa’s potential as a hydrogen economy and the recent launch of the world’s largest hydrogen-fuelled truck at Anglo American Platinum’s Mogalakwena mine.
In his speech, he briefly touched on Environmental, Social and Governance developments and the Just Energy Transition, but given that these are key topics for this year’s Indaba, we believe he could have discussed the issues in more depth. Interestingly, references to decent work (a key sustainability goal) and ensuring that people are able to work safely in mines were conspicuously absent from the Minister’s address. While calling for investment, the prerogative of investors and the mining operators is sustainability and responsible investing. This cannot be achieved in an environment where there is no transparent, consistent application of safety and employment legislation coupled with effective and efficient investigation into incidents, leading to the sharing of implementable actions to avoid recurrences across the industry. Aside from highlighting aggressive net-zero targets, a focus on sustainability by the investment community, and a holistic approach to ESG, little detail was given on how these targets and goals ought to be achieved.
The minister raised concerns about the need for universal access to electricity and more beneficiation of domestically-mined minerals. He reiterated that Government is aware of the importance of available and affordable electricity in determining the viability of local beneficiation operations and that this remains a key consideration of investors.
What was lacking in the minister’s speech was:
- A clear pathway, in light of Eskom's capacity shortfalls, to new energy generation capacity to service South African industry, including the mining industry, and households, through a liberalized energy market, as envisaged in the Electricity Regulation Amendment Bill, through enabling private power generation and sale, or otherwise.
- An acknowledgement of the current progress and blockages in the South African mining industry.
- Any positive regulatory adjustments in the pipeline that might facilitate investment.
- Any mention of the mining cadastral system (which has been under development for many years).
- How co-ordination among different government departments, which is hindering implementation of positive regulations, is being addressed.
- How infrastructure blockages are being tackled.
Overall, the speech appeared to consist largely of vague platitudes and generalisations about the state of African mining. It lacked the persuasiveness and the substance that local mining companies and potential foreign investors are seeking from government leadership.