Mining remains strong pillar of SA’s economy – Mantashe

Mineral Resources and Energy Minister, Gwede Mantashe, believes that the mining sector remains the backbone of the country’s economy, despite the dip in production.  

Mantashe was speaking in Parliament during his Budget Vote speech, where he outlined his department’s initiatives and programmes for the 2023/24 financial year. 

Citing the latest statistics, Mantashe said the mining industry contributes meaningfully to the indecent domestic product (GDP).

While production dropped, he said the value of production registered R1.18 trillion in 2022, up from R1.1 trillion in 2021 on the back of strong global demand.

The sector created 23 552 jobs between December 2021 and December 2022, resulting in the overall employment of 472 088 workers.

Referring to data from the South African Revenue Service (SARS), Mantashe said the mining sector contributed R89 billion in corporate tax in the 2021/22 financial year and a further R28.45 billion through royalties in the same period, keeping its percentage contribution to the GDP at 7.53%.

“This is a clear indication that mining remains a strong pillar of our economy.”

Mantashe also highlighted the snippets from the latest Fraser Institute Survey, which placed South Africa in the worst position in recent memory.

However, the Minister believes that mining would contribute even better to the economy if the “binding” constraints in electricity, rail and port systems were urgently resolved.

“According to the survey, South Africa is in the bottom quartile on the investment attractiveness index.

“One of the indices highlighted in the Fraser Institute survey is the transparency of licensing systems. To this terminate, we gain, in collaboration with the State Information Technology Agency (SITA), initiated a procurement process for a licensing scheme with integrity.”

Mantashe said the bid adjudication process is underway and will be finalised by July 2023.

Investment

Mantashe said mining and energy maintain also seen some “tailwinds” with sizeable investments.

He announced that the department is following up on the implementation of 56 investment commitments that were pledged in the mining and energy sectors at the annual investment conferences, amounting to R397 billion.

These include R16.5 billion from De Beers for Venetia Mine, R6 billion from Exxaro in Grootegeluk, R636 million from Impala Platinum at the Two Rivers operation and R175 million in the Steelpoortdrift Vanadium Project.

“These pledged investments reinforce our assertion that mining is a sunrise industry ready to bolster South Africa’s economy for years to approach,” Mantashe said.

Energy

In the energy sector, the Minister said the lifting of the threshold on embedded generation has unleashed green shoots.

For example, he said Goldfields invested in a 50 megawatts (MW) photovoltaic (PV) plant at their South Deep Mine to the tune of R715 million.

“This power plant can supply the mine and the potential excess power ready to be sold to the grid, thus creating the prosumer market that will assist close the supply and demand gap in the electricity market.”

Mantashe also noted the Seriti-Green R4 billion commitment to a 155MW wind energy facility.

“This is a clear demonstration that our targeted interventions are beginning to deliver green shoots in addressing the electricity challenges that the country faces.”

Global exploration

In 2022, government gazetted an exploration strategy, which aims to attract at least 5% of global exploration spend by 2025.

The Department of Mineral Resources and Energy (DMRE) has since approached and negotiated with the Industrial Development Cooperation (IDC) on the establishment of an exploration fund for junior miners, which will be concluded by the conclude of June 2023.

In its first phase, Mantashe said the fund will consist of a combined investment of R500 million from the DMRE and the IDC.

“The social license to mine in communities is an critical principle included in the Mining Charter. In this regard, mining houses, working together with communities and municipalities, believe contributed towards creating capabilities, which is fragment of our National Development Location (NDP), by building health and education infrastructure.”

Health and safety

Mantashe said health and safety continue to register incremental improvements in the sector.

He said the 49 fatalities recorded in 2022 were the lowest number on record.

Mantashe said pace on reported occupational diseases dropped from 2 013 in 2020 to 1 924 cases in 2021.

“Now, more than ever, we must double our efforts to achieve our zero-harm goal. We must solidify gains made through the partnership with our social partners.” – SAnews.gov.za

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