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SA mining gears up for major talks
Allan Seccombe | Mon, 29 Mar 2010 13:13
[miningmx.com] -- A mining summit between the South African government, mining companies and labour aims to prepare the sector to catch the next boom in commodity prices after it missed the last one and also address concerns about transformation, said Mineral Resources Minister Susan Shabangu.
The two-day summit starts on 30 March.
Shabangu identified two key areas that participants will address.
“The summit will focus on a growth path for the industry and transformation. This sector won’t grow unless we address issues around transformation,” Shabangu told Miningmx.
The Department of Mineral Resources has conducted a review of the Mining Charter enacted in 2005 and how it has been implemented. This review has been sent to mining companies and the Chamber of Mines for response. This is one of the core issues to be discussed at the summit.
Another issue, equally as important, will be power. South Africa ran short of power in 2008, causing deep-level gold mines to shut down for a week in June. Mines has subsequently reduced power consumption by 10% but there are fears that the country will run short of power over the next few years until Eskom’s build programme to add capacity is commissioned.
South Africa largely missed the last commodity boom, which came to a grinding halt with the financial crisis late in 2008 and well into 2009. Shabangu said the sector had not properly focused on reaping the benefits of the commodity boom and had instead concentrated on drafting and implementing the new mines Act and its related Mining Charter.
“All partners say we have identified the weaknesses that caused us to miss that opportunity and now we must rectify those areas so we can take advantage of the stabilised global economy. We want to position for growth,” she said on the sidelines of the listing of Optimum Coal Holdings on the JSE.
The three partners had realised they could work effectively together after minimising job losses at the height of the economic crisis by setting up a task team to address the issue, she said.
“We did that successfully and now our next step is to map bigger growth for the sector,” she said.
Included in the summit will be hammering out a position on beneficiation, something the government is very keen to see happen to create jobs and generate more wealth for the country by exporting value-added products instead of raw materials.
Efforts in the diamond sector to create a strong cutting and polishing industry have not been successful. The State Diamond Trader, which was set up in 2007 to increase the flow of rough diamonds to local cutters and polishers, has been roundly criticised by mining companies and diamond buyers.
David Noko, the outgoing MD of De Beers Consolidated Mines (DBCM), called it a “mess” that needed fixing.
Shabangu has been particularly pointed when addressing concerns about transformation of the industry, accusing companies of fronting and doing the bare minimum just to qualify for licences. She defended her comments.
“I think business understands and accepts me and that we must have frank talk around these issues. We must be honest with each other. If there is sweet talk all the time then we will not reach the tough decisions we need to make,” she said.