Shabangu Moves to Reassure Investors at Mining Indaba
Posted on 7th February 2013

Cape Town February 5 – South Africa’s Minister of Minerals Resources Susan Shabangu has reaffirmed that nationalisation is neither ANC nor government policy. Delivering the official opening address at the 19th Investing in Mining Indaba™ in Cape Town on Tuesday she said: “I appeal to you not to try to resuscitate this debate in different forms and guises, which may invariably be marred by differently unhelpful interpretations.” Shabangu also requested the gathering to deepen their understanding of ANC policy by reading the ANC resolution on the mining industry adopted at the party’s 53rd national conference in December 2012.
During her address Shabangu highlighted the inherent interdependence between the mining sector and the government. “I would like to affirm that our government is fully conscious of the reality that mineral development cannot happen unless capital is invested by the private sector. There is room for both private and public returns.”

She said that the process of hiving off the state-owned mining company, African Exploration Mining and Finance Corporation, from the Central Energy Fund is at an advanced stage and should be completed by the first half of 2013. “We have also embarked on the process of strengthening the company by consolidating identified state mining assets into it.”

The Minister urged all stakeholders to avoid treating only the symptoms of the problems afflicting the mining industry, but to “address the underpinning structural and historical elements.” She emphasized that this will require partnerships in order to “obviate any prospect of the events of last year repeating themselves” – reference to the Marikana tragedy in which 44 people were killed

Speaking at a press conference on the sidelines of the Mining Indaba, the Minister said: “The reality is that Marikana will not happen again, we must learn through our mistakes, what triggered it must be addressed.” The Minister said factors in the buildup to Marikana included skills shortages, illiteracy and poor working conditions.

The Department of Mineral Resources (DMR) is currently reviewing South Africa’s mining legislative framework, the Minerals Petroleum Development Act (MPDA) of 2002. Cabinet has approved a set of amendments proposed by the DMR, and they were gazetted in December last year. Shabangu said the ball is now in Parliament’s court, adding that she does not expect the Act to have a smooth ride through the legislature. “Parliament is becoming more robust and dynamic. We all know that in the past there have been disagreements with Cabinet.” She urged stakeholders and interested parties to make their submissions, both formal and informal, to parliament. The deadline for public comment is February 8.

The Minister said that the amendments are to remove any ambiguities in the Act that might create “room for a multiplicity of interpretations” and to strengthen the administrative processes and enhance sanctions for non-compliance. The mining industry has raised some concerns around the proposed amendments. One is around the discretionary powers that are given to the Minister over beneficiation, particularly with regard to the pricing of domestic supplies. The Minister said the approach is about “ensuring that South Africa has access to some commodities for local beneficiation.” The exact formula that will be used to determine domestic pricing has not yet been developed. The Minister said the DMR is still “thinking about it,” in consultation with other stakeholders.

Evaluating the positive impact of past regulatory reforms in South Africa, Shabangu cited the increase in the number of mines in the country, from 993 in 2004 to almost 1600 today; the growth in revenue generated in nominal terms from R98bn in 2004 to R370bn by the end of 2011; and the growth in employment in the mining industry from under 449 000 in 2004 to above 530 000 by June 2012.

In reference to ongoing discussions with Anglo American Platinum around its restructuring proposals, the Minister said that government is still talking to Amplats and that at this stage there is “no review of the company’s licence. We are satisfied that the process of talking will yield a positive outcome.”