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ADU PReVIeW

South African miners

call for rapid response

fter playing a pivotal role in keeping the the industry has done a good job on vacci-
Acountry’s head above water during the nations, with a rate of 76% versus less than
strongest waves of the COVID pandemic, 46% for the whole country. COVID fatalities
South Africa’s mining industry is now looking are also lower in the industry – 1.8% versus
to the Government to provide it with some more than 2.6%.”
buoyancy. Having delivered the country economic
Like its Australian counterpart, the South impetus when it most needed it, the indus-
African resources sector was a crucial con- try is now calling on the Government to stick
tributor to the national economy in 2020 with its partnership and deliver much-need-
and 2021 as international border closures ed reform to the sector. Baxter said the im-
wrecked other key industries such as tour- proved economics were created by rampant
ism and manufacturing. According to Miner- commodity prices rather than better operat-
als Council of South Africa figures, the sec- ing conditions.
tor’s direct contribution to GDP grew 36% to “This wasn’t a volume story, it was a price Cyril Ramaphosa
R481 billion ($41.65 billion) last year with its story,” he said. “Revenue grew because of
contribution to the economy improving from higher prices. As much as we managed to underperformance and the real opportunity
7.1% to 8.7%. It also employed more people, do well in 2021, we didn’t get the volumes.” cost is closer to R50 billion,” he said.
458,954, up from 452,866. Baxter said industry was welcoming of South Africa is currently crippled by lim-
Minerals Council chief executive Roger the positive comments of President Cyril ited power capacity with load shedding
Baxter told Paydirt the sector played “an ef- Ramaphosa and the active support of Man- programmes seeing power switched off for
fective role in bailing out the economy”. tashe. several hours a day. Baxter said miners had
“Some 80% of all extra revenue from cor- “The President recognises mining has a taken practical measures to alleviate the
porations came from mining, we were the key role to play in the economy and every problem.
anchor tenant of the economy,” he said. time we have discussed it with Minister Man- “There is 4.2GW of mining-related power
Baxter pointed to the industry’s partner- tashe, he tells me how much he loves min- projects and we are working with the Presi-
ship with government as the reason why it ing,” he said. “COVID really demonstrated dent to shorten the regulatory timelines and
was able to increase its economic contribu- the importance of mining to South Africa, talking with [state power company] Eskom
tion during the pandemic. mining gave government a bunch of money on streamlining the process,” he said. “On
“Because of the constructive partner- they wouldn’t have otherwise had.” the rail, we are working with Transnet to get it
ship between government and industry, we For Baxter, the critical areas to address back to targeted performance.”
ended up saving lives and livelihoods,” he are obvious – infrastructure (energy, the rail The frustration on all fronts, however, is
said. “We got people back to work quickly, network and port facilities) and regulation the speed at which reform is happening.
and Minister [Gwede] Mantashe played an (applications and approvals, tax reform). “We are unhappy that we are not seeing
important role in encouraging the Cabinet to “Some 45% of production relies on gov- the level of progress quickly enough,” Bax-
get miners back to work. ernment input through railways, ports and ter said. “We have seen the slow pace of
“We implemented a set of operating pro- power. For the railways alone, some R35 structural reforms and we are concerned the
cedures to ensure workers were safe and billion has been left on the table because of Government is still not working fast enough
on red tape. Former mining industry leader
Sipo Nkosi has been appointed the red tape-
busting tsar, so we are hopeful of progress.”
The inertia around infrastructure and a
slow regulatory process has seen South Af-
rica fall further down international investors’
country wish lists. In April, the Fraser Insti-
tute Survey of Mining Companies ranked
South Africa 75th out of 84 jurisdictions
surveyed for investment attractiveness. This
compared with 60th out of 77 in 2020 and
40th out of 76 in 2019.
At the same time, the country’s share of
global exploration expenditure remains be-
low 1%, well off the 5% high of 2003.
“That fall is alarming, particularly given the
efforts of new director general of the Depart-
Workers at Rio Tinto’s Richard Bay Minerals operation. The mining sector’s ability to
vaccinate its workforce meant it was the key contributor to South Africa’s economy in 2021

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