By Hon. JA Esterhuizen MP
Spokesperson on Mineral Resources
Delivered at Parliament in the E249
15 May 2018
Vote 29: MINERAL RESOURCES
There can be no question that the poverty and underdevelopment in South Africa and even on the African continent stands in stark contrast to the abundunce of its mineral resources.
Through this it’s obvious that the view of mining taken by this government has been thoroughly deficient, as it sought to rather prioritise rent maximations whilst ignoring mining’s innate ability to function as a powerful lever of structural economic transformation.
The National Development Plan recognises this and recommended that the Mineral and Petroleum Resources development Amendment Bill should be amended to ensure a predictable, competitive and stable regulatory framework,
but unfortunately it seems that the intent of this department is to do exactly the opposite of what the NDP proposes in this regard.
It increased administrative discretion by delegating important regulatory functions to the minister of mineral resources, particularly in regard to local beneficiation of minerals.
And as if that is not enough it’s trying to further cripple the industry by removing all statutory time limits for the granting of rights in the act itself.
The migrant labour system, endemic to much of our mining industry and an unpleasant hangover from colonialism and apartheid, is a scar on the industry, which desperately requires reforming.
Between 1999 and today in 2018, the cost of labour at our mines has increased by 310 % while productivity declined by roughly 50 %.
So in reality we are producing half of what we did before at 300 times the expense. .
What is worse is the continued delay in the promulgation of key minerals legislation, which is deterring the investment required to make this country’s mining industry successful.
Honourable Speaker, Mining is an industry with long term horizons. When making investments, mining companies have to project strategy decades ahead. They need certainty as to the rules under which they operate.
They will simply not invest if there is any reasonable fear of unfair or unpredictable regulatory changes.
And this is while it’s estimated that South Africa still has 400 million tonnes of gold, 160 million tonnes of which are high grade ore that is amenable to profitable extraction, but yet without a shift in mining methodology and a more efficient Department of Mineral Resources, this would likely remain un-mined, causing a further 200,000 jobs to be lost.
The sad irony is that , whilst South Africa’s mining potential diminishes under DMR mismanagement, the country’s economic growth remains inadequate to drive the changes required for the country’s socioeconomic challenges.
The IFP supports the Budget Vote in the hope that the Department of Mineral Resources will do all that is necessary to ensure that the industry contributes effectively to economic transformation for all in South Africa.
I thank you.
Hon JA Esterhuizen MP